The first time I heard the term “FBAR,” I was sitting across from a client who had been sending money to Nigeria for six years — and had no idea she’d been required to file a report about it every single year.
She was a pharmacist. Smart, careful, organized. She wasn’t hiding anything. She just didn’t know the rule existed. And now she was looking at potential penalties for six years of unfiled reports, all because nobody had ever walked her through what the U.S. government expects when you move money across borders.
That meeting changed how I approach cross-border tax planning with every client I work with.
If you’re a first-gen professional from West Africa — or really anywhere in the diaspora — you’re operating in two financial systems at once. You pay taxes here. You send money there. You might have property, inheritance, or accounts in both countries. The U.S. tax code has rules for all of it, and most of those rules don’t show up in any onboarding packet you’ll ever receive at a new job.
This is the overview nobody gave you.
The U.S. Taxes Your Worldwide Income — All of It
Let’s start with the thing that surprises most people: if you live in the United States, the IRS expects you to report income from everywhere. That rental income from the family compound in Lagos? Taxable. A foreign pension? Reportable. A gift from a relative abroad over a certain threshold? There’s a form for that too.
This doesn’t mean you automatically owe tax on all of it. But you have to report it. And not reporting is where people get into trouble — not because they were trying to cheat the system, but because they didn’t know the rules existed in the first place.
Before you do anything else, work with a tax professional who understands cross-border tax planning specifically. General CPAs often don’t know this territory. Find someone who does. The financial planning work I do with clients always starts with a clear picture of both sides — the U.S. balance sheet and the home-country balance sheet — because you can’t fix a system you haven’t mapped.
The Foreign Tax Credit: The Best Tool You’re Probably Not Using
Here’s the good news in all of this.
The U.S. tax code has a mechanism specifically designed to prevent double taxation: the Foreign Tax Credit. If you paid taxes on income in Nigeria, you may be able to credit those taxes against your U.S. tax bill. The IRS isn’t trying to tax you twice on the same income — there’s just a process for telling them what you already paid abroad.
The tool for this is Form 1116. Think of it like the maintenance log on a mechanical system. The engine runs fine — but you have to document every service, every fluid check, every part replaced, or you can’t prove the work was done. Same principle here: you need records of what you paid, to which country, on which income. Keep every Nigerian tax payment record you can get your hands on.
If your income is complex — RSUs vesting, rental income, an inheritance from a relative abroad — this is where a specialist earns their fee. Get it right once and it becomes a routine annual process. Get it wrong and you’re explaining it to an examiner three years from now when the records are harder to reconstruct.
FBAR and FATCA: The Reporting Rules That Sneak Up on People
Back to my pharmacist client.
FBAR — the Foreign Bank Account Report — is required if you have foreign financial accounts whose combined value exceeded $10,000 at any point during the year. It’s filed with the Treasury Department, not the IRS. It’s completely separate from your tax return. And the penalties for missing it range from annoying to catastrophic, depending on how many years you’ve been out of compliance.
FATCA adds another layer: if you have foreign financial assets above certain thresholds ($50,000 for single filers, $100,000 for married filing jointly), you declare them on Form 8938 as part of your regular tax return.
Neither of these rules is designed to punish you. They exist because the government wants visibility into cross-border money movement. Most first-gen professionals who get caught by them weren’t doing anything wrong — they just never knew the thresholds existed.
The fix is simple in theory: know your thresholds, document your accounts, and file. Build it into your annual checklist. Every year before April: confirm FBAR status, confirm Form 8938 status, confirm any foreign gifts over $100,000 that need Form 3520. That’s the whole compliance system for most people. Once it’s in your financial baseline routine, it’s about 45 minutes of work per year.
RSUs: The Tax Complication That Shows Up When Things Are Going Well
If you work for a U.S. tech company, hospital system, or research institution and you have Restricted Stock Units, cross-border complications can show up in a specific way: if you spent time working outside the U.S. during the period those RSUs were being earned, some of that income may be apportionable to a foreign country.
This matters because some countries have claims on RSU income earned while you were working in their jurisdiction. It’s rare for people who’ve been in the U.S. for years without ties abroad — but if you transferred here partway through a vesting schedule, or if you perform work in Nigeria regularly, ask your tax advisor about it directly.
The general rule: when your income is rising — RSUs vesting, promotions coming, portfolio growing — is exactly when cross-border long-term financial planning needs to get more intentional, not less. This is not the time to set it and forget it. This is the time to build systems.
Remittances: Plan Them, Don’t React to Them
One more piece that affects almost every diaspora professional: remittances.
Sending money home is not a tax problem in itself — you’re sending after-tax dollars, and standard remittances to family don’t trigger income tax issues. But there are two practical points worth knowing.
First: if you’re using traditional bank wires, you’re probably losing $50–150/month in conversion fees alone. That’s $600–1,800/year that never reaches home. Services like Wise or Remitly move the same money with significantly lower overhead. This is not a small thing.
Second: if you ever receive money from abroad — an inheritance, proceeds from a property sale, a large gift — the reporting rules kick back in. Inheritances and large gifts from foreign persons have their own IRS forms. Document everything. The rule of thumb: if a large amount of money crosses any border, ask your tax advisor before you move it, not after.
The Challenge
Cross-border tax planning doesn’t have to be overwhelming — but it does require attention. Here’s where I leave you with something concrete.
This week, pull up your records and answer these three questions honestly:
- Do I have any foreign financial accounts that have ever held more than $10,000 combined? If yes — have I been filing FBAR annually?
- Do I have foreign financial assets above the FATCA thresholds? If yes — is Form 8938 on my tax return?
- Does my tax advisor know the full picture of my cross-border situation, including remittances, any foreign property, and any inheritance in the pipeline?
If you can answer yes to all three, you’re in better shape than most people in this situation. If you can’t, now you know exactly what to fix.
Regardless, the goal is not to make this complicated. It’s to take something that feels overwhelming and turn it into a system you run once a year — the same way an engineer runs a maintenance check on a system they built and trust.
That’s what this work is. You’re the engineer. Build the system.
Thanks for reading — I’m Chudi, The Financial Engineer. I help first-gen STEM and healthcare professionals build wealth without burning out or abandoning family obligations.
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