The United States taxes its citizens wherever they live, so moving to Portugal does not end your US filing obligations. Once you are resident here, you also file in Portugal. Handled well, the two systems fit together and you avoid paying tax twice on the same income.
Two countries, one income
Portugal taxes residents on their worldwide income, and the US keeps taxing you as a citizen. The US–Portugal tax treaty and foreign tax credits work together so that tax paid in one country can be credited in the other. The order in which they apply makes a difference, and that is where planning pays off.
What changes in practice
Portuguese banks will ask for your US tax details (FATCA), and you keep reporting your Portuguese accounts to the US (FBAR). Some US investments and retirement accounts are treated differently in Portugal, so it is worth reviewing them before you move.
Setting up in Portugal
You will need a NIF (with a tax representative until you live here), registration with Social Security and, once resident, your address updated with the Tax Authority. If you work in a qualifying profession, IFICI can lower your Portuguese tax for ten years. We prepare your Portuguese returns and work alongside your US tax preparer, who files your US return.