By Sandra Block, Senior Associate Editor From Kiplinger's Personal Finance, August 2013 Retiring abroad has lots of advantages, but reducing your tax bill isn’t one of them. As long as you’re a U.S. citizen, you’ll still be required to pay U.S. taxes on income from your investments and other sources. And if you maintain a residence in the U.S., you may be subject to state taxes, too.See Also: Retire Where You Want If you earn income in your adopted country, you may be able to exclude up to $97,600 from U.S. income taxes in 2013 by claiming the Foreign Earned Income Exclusion. This law enables you to avoid paying taxes to two countries on the same income. You could face an unexpected tax bill from your adopted country as well. Many countries base their tax systems on residency, not citizenship, says Christine Ballard, a CPA in the international tax division of Moss Adams LLP. The U.S. has tax treaties with many foreign countries to prevent double taxation, but you may still have to file a tax return. Moreover, if you die while living outside the U.S., property you purchased in your adopted country could be subject to that jurisdiction’s estate taxes. Even if you’ve usually done your own taxes, you should get advice from a tax professional who is well grounded in foreign tax laws.