Guide to Filing Your US Expat Taxes in Latvia
June 20, 2025 | Country Guides | 13 minute read
Expat Tax Blog. Tax Tips for US Americans abroad.
Updated June 19, 2025
All blogs are verified by Enrolled Agents and CPAs
Updated June 19, 2025
Thinking about life in Latvia and wondering how US taxes fit in? You’re not alone—and yes, you still need to file! The good news? US expat taxes for Americans in Latvia come with plenty of benefits, from tax credits to exclusions that help you avoid paying twice. Whether you’re in Riga or a quiet coastal town, here’s what you need to know to stay compliant—and keep more of your income. Let’s break down US–Latvia expat taxes in a way that’s simple and stress-free.
Who Needs to File US Expat Taxes?
Choosing the Right Filing Status
US-Latvia Expat Tax Agreements
Navigate US-Latvian Expat Tax Obligations
Optimize Your Taxes with US Tax Benefits: US-Latvia Expat Tax Strategies
US Financial Reporting Requirements
Investing in Latvia as a US Expat
Self Employment in Latvia for US Expats
Catch-Up with the Streamlined Procedure
US-Latvia Expat Taxes Made Easy with MyExpatTaxes
Who Needs to File US Expat Taxes?
You might be surprised to learn that the need to file US taxes travels with you, no matter where you live. The US is one of only two countries that taxes based on citizenship, rather than residency.
In 2025, if you are a US citizen or green card holder who meets any of the following thresholds, you’ll need to file your 2024 US taxes:
| Filing Status | Income Threshold |
|---|---|
| Single | $14,600 |
| Married Filing Jointly | $29,200 |
| Married Filing Separately | $5 |
| Self-Employed | $400 |
| Qualifying Widow(er) | $29,200 |
| Head of Household | $21,900 |
As a result, you could be subject to double taxation. But don’t worry, this US-Latvian Expat Tax Guide will explain how to optimize your US return to avoid paying taxes on the same income twice.
Choosing the Right Filing Status
Choosing the right filing status is one of the first—and most important—steps in preparing your US tax return from Latvia. Your status affects your tax rate, deductions, and how much you might owe (or get back).
If you’re unmarried, you’ll file as Single. Easy and straightforward—no extra forms or decisions needed.
Married to a Non-US Citizen? If your spouse isn’t a US citizen or Green Card holder, they’re not required to file US taxes. Many expats in this situation file as Married Filing Separately to avoid reporting their spouse’s foreign income.
Married to a US Citizen or Green Card Holder? You’ll likely want to file as Married Filing Jointly, which generally provides the best tax breaks. The IRS requires both of you to report worldwide income, no matter where in Latvia (or beyond) you’re living.
If you’re unmarried, supporting an eligible dependent, and covering most household costs, you might qualify as Head of Household. This status can lower your tax bill compared to filing as Single or Separately—definitely worth considering!
US-Latvia Expat Tax Deadlines
US expats are afforded an extra two months to prepare their tax return. However, any taxes owed are still due by April 15th to avoid interest charges.
| Date | Deadline |
|---|---|
| April 15th | Standard Filing Deadline |
| June 16th | Expat Tax Filing Deadline |
| October 15th | FBAR & Tax Extension Deadline 1 (by digital request) |
| December 15th | Tax Extension Deadline 2 (by written request) |
In Latvia, many tax obligations are monthly or quarterly. For example, employers need to report income and withhold taxes for employees by the 15th of the following month, with payment due by the 23rd of that month.
You can stay up-to-date with deadlines (as well as tips and offers) straight to your inbox with the MyExpatTaxes newsletter. No spam: guaranteed.
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Why Choose Latvia?
Latvia is quickly gaining popularity with US expats—and for good reason. With its charming capital city of Riga, natural baltic beauty, affordable cost of living, and fast-growing digital infrastructure, Latvia offers the perfect mix of old-world beauty and modern convenience. The country is part of the EU and the Schengen Zone, making travel across Europe easy and visa options more accessible.
Public healthcare is available to legal residents at no or low cost, and ranked 14th out of 195 countries in the Global Health Security Index (2021). However, many expats opt to supplement public health with private health insurance for shorter wait times and greater access to English-speaking care. Latvia is considered safe, with low violent crime rates, though petty theft can occur in tourist-heavy areas. However, there are a few things to consider. English is becoming more widely spoken, especially in urban centers, but it’s less spoken in rural areas, which may pose a language barrier. Winters can be long and dark, especially for those used to sunnier climates. Still, for many expats, the pros far outweigh the cons.
Visa Options Latvia
Before diving into US–Latvia expat tax rules, let’s review your visa options.
You can check out Latvia for up to 90 days with no visa required, but from 2026, US citizens will need to apply for the ETIAS to enter the Schengen area.
When it comes to longer term stays, Latvia offers several alternatives.
Student Visa: If you’re studying in Latvia, you’ll need a long-stay student visa, valid for 90 days. If your program is longer, you’ll also need to apply for a residence permit to cover the full duration of your studies.
Work Visa: If you’re planning to work in Latvia, you’ll need a work visa, a residence permit, and a work permit requested by your Latvian employer. The type of work permit depends on how long you plan to stay and the nature of your job.
Family Visa: Want your spouse or children to join you? You’ll need to apply for a family visa for them at a local Latvian immigration office. It’s valid for three months—after that, they’ll need a residence permit. Proof of family ties (like a marriage or birth certificate) is required.
EU Blue Card: For highly skilled professionals, the EU Blue Card allows them to live and work in Latvia and offers an easier path to residency.
Golden Visa: Are you thinking of investing in Latvia? In 2025, the Golden Visa program will offer residency (and potentially citizenship) through qualifying investments in real estate (of at least €250,000), business (€50,000+), or government bonds (€250,000+ for 5 years).
US-Latvia Expat Tax Agreements
The US-Latvia Expat Tax Treaty helps prevent double taxation and outlines which country has taxing rights over specific types of income—such as wages, pensions, dividends, and business profits. In some cases, it reduces or eliminates taxes on certain income sources. However, due to the Savings Clause, most treaty benefits don’t apply to US citizens. This clause allows the US to tax its citizens as if the treaty wasn’t in place. The treaty is still useful for clarifying which country taxes what, and it supports the use of credits to avoid being taxed twice on the same income.
No totalization treaty exists between the two countries. Unfortunately, this means that some expats, such as self-employed workers and those working abroad for a US company, may face double Social Security tax. The coordination of social security benefits is also complicated, and credits earned from work in one country may not count in the other. The upside, is that you may be able to draw from both pots upon retirement.
Navigate US-Latvian Expat Tax Obligations
Tax Residency
You’re generally considered a Latvian tax resident if you’ve spent at least 183 days in the country in any 12 month period, or your declared residence is in Latvia.
If neither applies to you, you’ll only be taxed in Latvia on your Latvian-sourced income.
Personal Income Tax (PIT)
Latvia’s progressive personal income tax system taxes income up to €105,300 at 25.5%, and income over €105,300 at 33%. An additional 3% is levied on income over €200,000. PIT on income from capital (including interest and dividends) is charged at 25%.
National Social Insurance Contribution (NSIC) & Solidarity tax (ST)
Contributions are required for income above €740, up to an annual income cap (€105,300 in 2025), with rates generally split between employers (23.59%) and employees (10.5%).
A Solidarity Tax applies on income exceeding the NSIC cap (€105,300), payable at the same rate as NSIC (~23.6% for employer and ~10.5% for employee).
Optimize Your Taxes with US Tax Benefits: US-Latvia Expat Tax Strategies
If you’re navigating US-Latvia expat tax obligations, you’ll be pleased to know that the IRS offers some key credits and exclusions that can drastically reduce–or eliminate–your US tax liability.
Foreign Earned Income Exclusion (FEIE)
The Foreign Earned Income Exclusion lets you exclude up to $126,500 in foreign earned income—like wages or freelance income—from your US taxes. Passive income, such as dividends or rental income, isn’t eligible. To qualify, you’ll need to meet either the bona fide residence test—being a resident of a foreign country for an entire tax year—or the physical presence test—being physically present in a foreign country for at least 330 full days during any 12-month period. If you also have high housing costs, you could also benefit from the Foreign Housing Exclusion, which helps reduce your taxable income further.
Foreign Tax Credit (FTC)
The Foreign Tax Credit helps US expats avoid double taxation by letting you offset your US tax bill with taxes paid to a foreign country. Unlike the FEIE, the FTC applies to both earned and passive income—just be sure to match the type (earned tax credit to earned income, passive to passive). You’ll need to convert your foreign taxes to USD and apply them to your US liability. The FTC is especially useful if you’re in an income bracket that pays higher taxes in Latvia than you would in the US. Any excess Foreign Tax Credit can be carried back 1 year and/or forward up to 10 years.
Child Tax Credit (CTC)
The Child Tax Credit gives you up to $2,000 per qualifying child to lower your US tax bill. You may also qualify for the refundable portion—the Additional Child Tax Credit (ACTC)—which offers a refund of up to $1,700 per child, if your earned income exceeds $2,500. Note: if you use the FEIE, you can’t claim the ACTC. That’s why some expats choose the FTC instead.
Tax Tip: MyExpatTaxes automatically calculates the best combination of tax benefits for your tax situation, ensuring you never pay a cent more than you have to!
US Financial Reporting Requirements
US citizens living in Latvia must comply with FBAR and FATCA, two important reporting requirements that target offshore tax evasion. These rules require you to disclose foreign financial accounts and assets once they pass certain thresholds.
If your foreign accounts total more than $10,000 combined at any time during the year, you’ll need to file the FBAR (Foreign Bank Account Report) with FinCEN form 114.
Under FATCA, you also need to report foreign financial accounts and assets exceeding $200,000 on IRS Form 8938, filed with your federal tax return.
Failing to comply with FBAR or FATCA can result in steep penalties—even if you owe no US tax.
Good to Know: MyExpatTaxes supports FBAR and FATCA filing as standard.
Investing in Latvia as a US Expat
The US tax system can be tricky when it comes to investing abroad—but with a bit of planning, it’s completely manageable. Once you understand the rules, investing as a US expat in Latvia can be both straightforward and rewarding.
Popular Investment Options in Latvia include:
- Real Estate: Americans are allowed to buy apartments, houses and commercial property in Latvia, even as a non-resident. Cities like Riga, Jurmala, and Liepaja offer attractive rental markets and lifestyle perks. Total transaction costs are typically between 3.8% to 8.1% of the property value, with capital gains taxed at 25.5%.
- US-Based Retirement Accounts: If you have eligible earned income and meet the adjusted gross income thresholds, you can still contribute up to $7,000 per year ($8,000 if you’re over 50) to a US IRA or Roth IRA. This helps you grow your retirement savings while living abroad.
- US Stocks and Funds: Foreign mutual funds or ETFs are often classified as PFICs (Passive Foreign Investment Companies), which are heavily taxed by the IRS. Make your life simple by investing in US-based investment platforms.
Already own Latvian investment funds? No problem—MyExpatTaxes can help you file Form 8621 and stay compliant as simply as possible.
Self Employment in Latvia for US Expats
Self-employed expats face unique US-Latvia expat tax rules, especially with Social Security and Medicare contributions.
In Latvia, if you are self employed, you’ll pay 31.07% towards your National Social Insurance Contribution (NSIC), with the option to pay 10% if your income is below a certain threshold.
You’ll also need to file a US tax return and pay self-employment taxes, including Social Security and Medicare, totaling 15.3% of your net profit if you’re self-employed abroad and your net earnings reach $400.
While the Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC) can help offset income tax owed to the US, neither can lower your self-employment tax.
Retiring in Latvia
Latvia offers a peaceful and affordable retirement option for US expats seeking a quieter life in Northern Europe. Retirees enjoy a relaxed pace of life and easy access to nature, with forests, lakes, and the Baltic Sea close at hand.
Under the US–Latvia Tax Treaty, pensions are taxable in your country of residence. The personal income tax (PIT) exempt minimum amount for old-age pensions is €1000 a month in 2025, with any excess taxed at 25.5%. The cost of living is low by European standards, and rent, groceries, and services are far cheaper than in the US. So your US pension could afford a very comfortable life in Latvia.
Riga is the most popular choice for expats, thanks to its amenities, international airport, and growing expat community, while smaller cities like Liepaja and Cesis offer even lower costs and scenic charm. For those seeking a budget-friendly European retirement with historic charm, Latvia could be just the place to spend your golden years.
Catch-Up on US-Latvia Expat Taxes with the Streamlined Procedure
If you just realized that you were, in fact, meant to file your US taxes while living abroad, there is a quick way to become IRS compliant! With the Streamlined Procedure, you only need to file 3 years of tax returns and 6 FBARs and won’t have to pay any failure-to-file or FBAR penalties. This is an amnesty program so, as you would expect, you need to take advantage BEFORE the IRS contacts you, or you become ineligible and could face hefty fines.
US-Latvia Expat Taxes Made Easy with MyExpatTaxes
Reading our US-Latvia Expat Tax Guide may have given you a lot to think about, but filing your US return from abroad doesn’t have to be complicated. Our award winning software has made filing easy for thousands of expats.
Most of our customers e-file their US taxes in under 30 minutes! And for those with more complex situations, work with a Tax Professional for the ultimate peace of mind. Whatever your tax needs, we have the right solution for you at an affordable price.
Take control of your taxes in 2025, maximize your benefits, and sleep easy knowing you are fully IRS compliant with MyExpatTaxes.
Written by Nathalie Goldstein, EA
Nathalie Goldstein, EA is a leading expert on US taxes for Americans living abroad and CEO and Co-Founder of MyExpatTaxes. She contributes to Forbes and has been featured in Forbes, CNBC and Yahoo Finance discussing US expat tax.
June 20, 2025 | Country Guides | 13 minute read
