foreign income exclusion


foreign income exclusion

For the 2015 tax year, you can exclude up to $100,800 from your US taxable income by qualifying for the Foreign Earned Income Exclusion

Do I qualify for the Foreign Earned Income Exclusion?

You could, if you are a US expatriate outside the United States, your tax home has moved abroad to a foreign country and you have foreign earned income. In other words, you are getting a salary from employment in a foreign country.
Now, in order to get the benefits of the exclusion you need to meet one of the two tests.

·         The first test is called the Physical Presence Test (PPT). This counts the number of days outside the United States in any 365-day period, starting with the first full foreign day overseas. You need to have been outside of the United States for at least 330 full days and then you meet the PPT test.

·         The second test is called the Bonafide Residents Test (BFR), and this is simply a full calendar year outside of the United States living and working in the foreign location. It needs to be from January 1st to December 31st.

If you meet either one of the two tests, you have moved abroad and you have the foreign earned income then yes, you would qualify for the benefits of the foreign earned income exclusion.

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Date published: 07/20/2016