Who qualifies for foreign earned income exclusion. Still, there are some important caveats that taxpayers .

Who qualifies for foreign earned income exclusion Who Qualifies? To claim the exclusion, you must meet all of the following: Have foreign earned income (wages, salaries, self-employment income from work performed abroad) Have a tax home in a foreign country Meet either: The Bona Fide Residence Test, or The Physical Presence Test Nov 5, 2025 · Persons who qualify are eligible to exclude up to $120,000 in foreign earned income on their 2023 US tax return (which needs to be reported in 2024) by filing IRS Form 2555. Household repairs. Do not submit Form 2555 by itself. These requirements apply to: Employees of foreign companies; Self-employed expats; Digital nomads who meet the Oct 27, 2025 · What is FEIE? The Foreign Earned Income Exclusion (FEIE) is a vital tax provision for U. To claim the FEIE in 2025: File Form 2555 with your tax return, qualify under either the Physical Presence Test (330 days abroad) or Bona Fide Residence Test (full-year foreign resident), and exclude up to $130,000 in foreign Nov 1, 2025 · US expats: The 2025 Foreign Earned Income Exclusion (FEIE) limit is now $130,000. This provision recognizes the challenges of living abroad and aims to prevent double taxation of income earned outside the United States. tax liability by claiming foreign taxes paid on income earned abroad. ” - Laurence J. Feb 24, 2025 · Foreign Earned Income: Income must be earned from services performed in a foreign country to qualify for the FEIE. 6 days ago · Understanding the Foreign Earned Income Exclusion and Who Qualifies The Foreign Earned Income Exclusion (often referenced as the FEIE) allows a qualifying U. Jun 20, 2023 · To qualify for the FEIE, you must meet specific criteria established by the IRS. Find out who qualifies, the exclusion limit, and how to claim it. citizens or resident aliens who qualify for the Foreign Earned Income Exclusion (FEIE). As of the 2023 tax year, the maximum exclusion amount is $120,000. It shouldn’t be confused with the Physical Presence Test, the other way to qualify for the exclusion. Foreign earned income exclusion and foreign housing exclusion and deduction Certain taxpayers can exclude or deduct income earned in foreign countries. Oct 9, 2025 · The Foreign Earned Income Exclusion allows you to exclude income that you earn when working in a foreign country. citizen or resident alien qualifies for the Foreign Earned Income Exclusion (FEIE). Who Can Use Form 2555? To qualify for the Foreign Earned Income Exclusion, you must: Be a U. Discover key forms, tax credits, and expert tips for expats. Feb 7, 2025 · Note: Although you can still meet the minimum time requirements under the bona fide residence or physical presence test under this exception, in figuring your foreign earned income exclusion or deduction, the number of your qualifying days of bona fide residence or physical presence only includes days of actual residence or presence within the Mar 16, 2025 · What is the Physical Presence Test? The Physical Presence Test is a method established by the IRS to determine whether a U. This exclusion is particularly beneficial for Americans working and living overseas, as it helps reduce the potential burden of double taxation. Let’s explore what the FEIE is, how to qualify, and how to… Jan 8, 2025 · Learn about the Foreign Earned Income Exclusion (FEIE) and how it can benefit eligible taxpayers. Oct 26, 2022 · Just like qualifying for the foreign earned income exclusion, you must reside in a foreign country and qualify under the bona fide residence test or the physical presence test. Feb 6, 2025 · Foreign Housing Exclusion or DeductionIn addition to the foreign earned income exclusion, you can also claim an exclusion or a deduction from gross income for your foreign housing amount if your tax home is in a foreign country and you qualify under either the bona fide residence test or the physical presence test. Aug 29, 2025 · Understand the physical presence test, its criteria, and how it affects your eligibility for the Foreign Earned Income Exclusion. Mar 10, 2025 · Understand the Physical Presence Test to qualify for the Foreign Earned Income Exclusion and save on US taxes while abroad. Aug 12, 2025 · What is the Foreign Earned Income Exclusion (FEIE) and Form 2555? The Foreign Earned Income Exclusion is a special deduction that US expats living and working abroad can use to reduce, or exclude, the amount of their foreign wages or self-employment income that are subject to US tax. taxes, allowing you to exclude a significant portion of your foreign salary or self-employment income from your taxable income when filing your annual Form 1040. Jan 20, 2025 · US citizens who live and work outside the United States may be able to exclude all or part of their foreign-earned wages and self-employment income from the federal income tax through a provision called the Foreign Earned Income Exclusion (FEIE). Certain occupancy taxes. tax code that allows eligible taxpayers to exclude a portion of their income earned abroad from U. taxation (e. You also may be able to claim an exclusion or a deduction from gross income for your reasonable housing costs Income classification complexities Not all foreign compensation qualifies for the FEIE. Apr 23, 2025 · Learn how the Bona Fide Residence Test helps U. citizens and resident aliens living and working abroad. FEIE Jul 1, 2022 · For 2020, the exclusion was $107,600 of foreign earned income. With the 2025 tax year’s exclusion limit at $130,000, this remains one of the most useful benefits for expats. Learn who qualifies and how to lower your tax bill. Tax Home Test: Your tax home must be in a foreign country. What is the difference between the Bona Fide Residence Test and the Physical Presence Test? Key Takeaways Foreign earned income may be excluded from U. Oct 5, 2025 · The Foreign Housing Exclusion lets US expats deduct housing costs abroad. To qualify for FEIE, individuals must meet either the Physical Presence Test or the Bona Fide Residence Test. tax liability, and avoid double taxation. federal income tax return. To sum up, it prevents double taxation by allowing you to exclude your foreign wages from being taxed by the U. Part of the foreign earned income exclusion, the foreign housing exclusion allows expats to deduct certain living expenses from their taxable incomes. Nov 11, 2020 · The provisions for claiming foreign earned income exclusion are relatively straightforward. citizen or resident alien (green card holder), Have a tax home in a foreign country, Have foreign earned income, and Meet either the Bona Fide Residence Test or the Physical Presence Test. This includes wages, salaries, and professional fees. The two options available to qualify for the exclusion are the bona fide residence test and the physical presence test. The form also allows for the exclusion of certain foreign housing expenses if your Aug 28, 2018 · The Internal Revenue Service has announced that combat-zone contract workers may now qualify for the foreign earned income exclusion. To qualify, you must meet the Physical Presence Test or the Bona Fide Residence Test. This form allows you to exclude a certain amount of income you earned while living and working outside the U. In this article, you’ll learn about: • What is the Foreign Earned Income Exclusion?• How to qualify for Jun 28, 2016 · The foreign earned income exclusion is available only for income earned for services performed in a foreign country, and is claimed on IRS Form 2555 or 2555-EZ. tax. tax return. Oct 25, 2022 · The Bona Fide Residence Test is one of two ways U. citizens and resident aliens living abroad to exclude up to $126,500 of foreign-earned income from U. Jul 22, 2025 · The Foreign Earned Income Exclusion (FEIE) is a critical tax benefit for U. Still, there are some important caveats that taxpayers Nov 7, 2024 · How to meet the Bona Fide Residence Test to qualify for the Foreign Earned Income Exclusion and how it compares to the Physical Presence Test. Aug 24, 2018 · The new law makes it clear that contractors or employees of contractors providing support to U. Tax on Income they earned abroad with the IRS Foreign Earned Income Exclusion. (In some cases, however, this may reduce your foreign earned income exclusion. Jul 1, 2022 · For 2020, the exclusion was $107,600 of foreign earned income. Purpose of Form If you qualify, you can use Form 2555 to figure your foreign earned income exclusion and your housing exclusion or deduction. citizens and resident aliens living abroad may qualify to exclude a significant portion of their foreign income from federal taxation using the Foreign Earned Income Exclusion (FEIE). These are the limits for 2025; the thresholds are adjusted each year for inflation. To pass the physical Nov 17, 2025 · Fortunately, it’s also possible to strategically plan your mid-year move so that you qualify for the Foreign Earned Income Exclusion (FEIE). That said, the nuances of what qualifies as earned income and applicable residence in a foreign country can be tricky. Feb 9, 2025 · The Foreign Earned Income Exclusion (FEIE) rises to $130,000 in 2025 (up from $126,500 in 2024). Learn what this means for your taxes and how the Foreign Housing Exclusion can really help you out. It applies only to active income, such as wages and self-employment earnings, but not passive income like investments or Feb 27, 2025 · The Foreign Earned Income Exclusion (Form 2555) allows qualifing US taxpayers to exclude up to $126,500 in 2024 and $130,000 in 2025. Apr 10, 2023 · Form 2555 is one of the tax forms you’ll want to get familiar with if you’re an American working and living overseas. Mar 28, 2024 · The foreign earned income exclusion serves as a critical element for Americans residing abroad, preventing double taxation. The most common case is the foreign housing exclusion or the foreign housing deduction. expats reduce their tax burden. taxes. This benefit, known as the Foreign Earned Income Exclusion (FEIE), can significantly reduce your tax liability. com Jul 29, 2025 · Section 911 of the Internal Revenue Code allows qualifying U. To be eligible for the foreign earned income tax exclusion, you must fulfill either the bona fide residence test or the physical presence test, and also have a tax home in a foreign country. Incorrectly claiming FEIE or Mar 16, 2025 · What is the Physical Presence Test? The Physical Presence Test is a method established by the IRS to determine whether a U. Apr 30, 2025 · Learn how the bona fide residence test helps US expats qualify for tax benefits, including the Foreign Earned Income Exclusion and Housing Exclusion. Discover two practical strategies to keep your $125K tax break when working with US-based partners. The Foreign Earned Income Exclusion (FEIE - found on Form 2555 of your tax return) is a US tax benefit that allows American citizens and resident aliens living abroad to exclude around $100,000 of foreign-earned income from their US taxable income. Form 2555 (Foreign Earned Income Exclusion) U. Oct 30, 2025 · Summary Understanding and properly claiming the Foreign Earned Income Exclusion can result in substantial tax savings for Americans working abroad. Mar 31, 2025 · Learn how to file Form 2555, qualify for the Foreign Earned Income Exclusion, and save on taxes. Oct 9, 2025 · If you’re working abroad in 2025, the Foreign Earned Income Exclusion (FEIE) could reduce your U. This is generally where you live and work. " Oct 25, 2022 · The Bona Fide Residence Test is one of two ways U. Jan 20, 2025 · The Foreign Earned Income Exclusion (FEIE) offers a significant opportunity for U. It’s crucial to calculate and claim the housing exclusion before the foreign earned income exclusion on the same form. To qualify, you must meet either the Bona Fide Residence Test or the Physical Presence Test, and your income must be earned in a foreign country. Person qualifies for the Foreign Earned Income Exclusion (FEIE) using IRS Form 2555, they may be able to legally reduce their taxable income by more than $100,000 annually. Aug 11, 2025 · Learn how the Foreign Earned Income Exclusion helps U. A Taxpayer may avoid U. While base salary typically qualifies, certain employer-provided benefits require careful consideration. The specific amount that you can exclude varies each year and is determined by the IRS. Here’s what you need to know about how it works and who qualifies: Who qualifies? Dec 17, 2019 · Foreign Housing Exclusion and Deduction In addition to the foreign earned income exclusion, you can also claim an exclusion or a deduction from gross income for your housing amount if your tax home is in a foreign country and you qualify for the exclusions and deduction under either the bona fide residence test or the physical presence test. citizen or resident alien living abroad to exclude a specified amount of foreign earned income from U. tax liability. Oct 22, 2024 · However, you could qualify for the Foreign-Earned Income Exclusion (FEIE), reducing your taxable income. citizens and resident aliens who live and work outside the United States. Here’s what you need to know about how it works and who qualifies: Who qualifies? Purpose of Form If you qualify, you can use Form 2555 to figure your foreign earned income exclusion and your housing exclusion or deduction. Apr 9, 2023 · Learn about the Foreign Earned Income Exclusion (FEIE) rules and eligibility criteria for US expats. Taxpayers living and working outside the United States may qualify to have a certain portion of their income excluded for U. Foreign Housing Cost Exclusion If your employer covers all or part of your foreign housing costs you may also qualify for a foreign housing cost exclusion. However, to qualify for the FEIE, a person needs to either work or reside outside the United States and pass the Bona Fide Residence or Physical Oct 10, 2025 · What is Form 2555? Form 2555, titled “Foreign Earned Income,” is used by U. Get expert expat tax services with Dimov Tax today! Sep 18, 2025 · What Counts as Foreign Earned Income in 2025? The FEIE only applies to earned income, which generally includes money you receive for working abroad, such as wages, salaries, self-employment income, professional fees, and commissions. citizens and resident aliens to exclude a portion of their foreign earned income from U. In fact, the exclusion applies only if you are a qualifying individual with foreign earned income who meets all of the requirements to claim the foreign earned income exclusion and you file a tax return reporting the income. federal income tax. expats qualify for the foreign earned income exclusion and reduce U. That’s more tax-free income for: - Digital Nomads – Work remote, pay less tax - Expats on Foreign Payroll – Keep more of your salary - Freelancers & Creators Abroad – Optimize your tax strategy - Con Learn more about the foreign earned income exclusion, including who qualifies, how to calculate foreign income and how to file. expats qualify for the Foreign Earned Income Exclusion by proving long-term intent abroad. Real and personal property insurance. Dec 5, 2024 · The physical presence test allows taxpayers to claim the foreign earned income exclusion if they have spent enough time abroad in a 12-month period. taxable income of American expats. List of eligible housing expenses: Rent Utilities (Telephone charges are not included). Investment income, rental income, and pension payments do not qualify for the exclusion. taxpayers can qualify for the Foreign Earned Income Exclusion (FEIE). Non-refundable security deposits. Apr 25, 2025 · Learn how the physical presence test helps U. To qualify, you must meet either the physical presence test or the bona fide residence test and be eligible to claim the foreign earned income exclusion. The Foreign Earned Income Exclusion (FEIE) is one of the most common ta. In general, foreign earned income is income received for services you perform in a foreign country. S Mar 14, 2025 · Form 2555 You must attach Form 2555, Foreign Earned Income, to your Form 1040 or 1040X to claim the foreign earned income exclusion, the foreign housing exclusion or the foreign housing deduction. In addition to the foreign earned income exclusion, you also can claim an exclusion or a deduction from gross income for your housing amount if your tax home is in a foreign country and you qualify for the exclusions and deduction under either the bona fide residence test or the physical presence test. taxpayers living abroad. Mar 21, 2025 · The Foreign Earned Income Exclusion (FEIE) allows U. Moreover, persons may also be eligible to to exclude an additional amount for housing using the foreign housing exclusion or deduction. The exemption doubles to $260,000 for married couples, both of whom are living and working abroad. Find out if you qualify for an exclusion on your expat taxes. Additionally, you must satisfy either the Physical Presence Test or the Bona Fide Residence Test, both of which determine your eligibility for the exclusion. taxpayers living abroad to exclude up to $120,000 (2023) of foreign-earned income from U. These tests determine if you've spent enough time abroad to exclude foreign income from U. Form 2555 shows how you qualify for the bona fide residence test or physical presence test, how much of your foreign earned income is excluded, and how to figure This may reduce the loss available to offset other worldwide income to your disadvantage. Regarding the second case, the site even says "The Tax Court distinguished the facts of this case from two other cases involving pilots who were deemed to qualify for the foreign earned income exclusion, because in those cases, the taxpayer either kept his home in the foreign country or very infrequently visited the United States. FEIE applies only to earned income, not passive income such as dividends, rental income, or pensions. Apr 7, 2025 · Did you know you can exclude US$130,000 per person from US taxes with the Foreign Earned Income Exclusion 2025? Learn how to qualify and how much you can save. Peter In this article, we’re going to provide a comprehensive overview of the Foreign Earned Income Exclusion, one of the primary means of reducing your US tax bill as an American living overseas. To qualify for the foreign earned income tax exclusion, individuals must meet either the bona fide residence test or the physical presence test, and have a tax home in a foreign country. For the tax year 2025, the IRS has increased the FEIE threshold to $130,000, up from $120,000 in 2023 Mar 31, 2025 · Check Now! Foreign Earned Income Exclusion (FEIE) allows U. Feb 19, 2025 · Learn how to file IRS Form 2555 to claim the Foreign Earned Income Exclusion, reduce U. Mar 31, 2025 · The Foreign Earned Income Exclusion (FEIE) is a critical component of the U. However, the foreign earned income and housing exclusions and the foreign housing deduction do not apply to the income you receive as an employee of the U. If both you and your spouse qualify, you may each exclude up to that amount, doubling the potential benefit. However, the rules are complex and your individual situation (multi-country work, self-employment, high housing costs, foreign taxes Mar 18, 2025 · If you’re working abroad, you have two main ways to handle your U. Government. taxation through the Foreign Earned Income Exclusion (FEIE) for qualifying expatriates. For tax year 2024 (filed in 2025), the maximum exclusion is up to $126,500 per qualifying taxpayer. Below are the criteria with which US expats can qualify: Bona fide residence test You pass the bona fide residence test by maintaining a continuous, bona fide Aug 14, 2025 · On this form, you’ll detail your foreign earned income, qualified housing expenses, and residency status (to show you meet either the physical presence test or the bona fide residence test). Find out if you qualify and how to maximize tax savings. However, not all types of income qualify. It allows eligible individuals to exclude a portion of their foreign earned income from U. taxation. An expatriate who qualifies for foreign earned income exclusion can also claim exclusion for housing amount. This provision is designed to reduce the impact of double taxation for expats who earn income in a foreign country. g. To qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, your tax home must be in a foreign country throughout your period of bona fide residence or physical presence abroad. Jan 13, 2023 · “America is a land of taxation that was founded to avoid taxation. Below, we explore how the FEIE works, who qualifies, and what Jun 20, 2023 · To qualify for the FEIE, you must meet specific criteria established by the IRS. tax burden while living abroad. Apr 15, 2003 · Foreign Income Exclusion You may qualify for an exclusion from tax of a limited amount of income earned while working abroad (IRC 911). However, you must file a tax return to claim it. The Jun 13, 2025 · If you meet certain requirements, you may qualify for the foreign earned income exclusion. Expert tips and advice to save on taxes. See full list on hrblock. For finance professionals and expatriates alike, understanding the intricacies of this tax provision is imperative for Apr 28, 2025 · US expats can maximize the Foreign Earned Income Exclusion on partnership income. Dec 13, 2024 · Claim the Foreign Earned Income Exclusion (FEIE) to exclude your earned income from your US Taxes and avoid double taxation as an expat. This exclusion can significantly reduce tax burdens for Americans living and working abroad whether employed, self-employed, or location-independent. Still, there are some important caveats that taxpayers Jul 15, 2024 · The Foreign Earned Income Exclusion (FEIE) is a tax benefit, allowing expats to exclude a portion of their foreign earnings from U. Dec 9, 2024 · The Foreign Earned Income Exclusion (FEIE) is a provision in the U. Other income does not qualify for the FEIE because it is not considered “earned” or “foreign earned”. May 16, 2025 · If you’re a US citizen or resident alien living and working abroad, you may be eligible to exclude a portion of your foreign income from US taxation. , $120,000+ depending on the year). Still, there are some important caveats that taxpayers Jun 6, 2025 · Find out how to report foreign income on 1040, including wages earned abroad, and legally reduce your tax bill with smart use of the foreign income exclusion. This test aims to ascertain whether an individual has spent sufficient time abroad to justify excluding a portion of their foreign earned income from U. To qualify, taxpayers must meet either the Physical Presence Test or the Bona Fide Residence Test. Jun 5, 2025 · The FEIE allows qualifying individuals to exclude up to $130,000 of foreign-earned income for the 2025 tax year. citizens living abroad to reduce their tax burden & avoid double taxation. Sep 29, 2025 · How Does the Foreign Earned Income Exclusion Work for Contractors? Defense contractors working in combat zones can exclude substantial amounts of their foreign earnings from US taxation. This comprehensive guide explores its definition, eligibility criteria, application process, and the nuanced aspects of foreign housing amounts. First and foremost, you must possess foreign earned income, which encompasses wages, salaries, and self-employment income acquired in a foreign country. Oct 25, 2022 · Learn more about the Physical Presence Test to qualify for the Foreign Earned Income Exclusion with the Expat tax experts at H&R Block. Oct 17, 2025 · Resource CenterIncome7 min readOctober 26, 2022October 26, 2022At a glanceLearn more about the Foreign Earned Income Exclusion with the Expat tax experts at H&R Block. There are two main provisions within the FEIE that allow a taxpayer to claim relief, the Physical Presence Test and the Bona Fide Residence Test. Jan 25, 2023 · However, taxpayers who live elsewhere might qualify for the foreign earned income exclusion, allowing them to exclude all or part of their foreign-source wages and self-employment income from U. Established by the IRS, FEIE allows these individuals to exclude a certain amount of their foreign-earned income from U. To qualify for FEIE, maintaining a foreign tax home is essential, as it relates to the To qualify for the Foreign Earned Income Exclusion using the Physical Presence Test, you must be physically present in foreign countries for at least 330 full days during a period of 12 consecutive months. The amount of the foreign earned income exclusion changes each year. This page covers the qualification requirements, foreign earned income exclusion, housing expenses, deductions, and meal and lodging amounts for specific tax years. The foreign housing exclusion applies only to amounts considered paid for with Feb 26, 2021 · How do I qualify for the Foreign Earned Income Exclusion? If you have a foreign employer, you may exclude up to $107,600 (as can your spouse, for a combined total up to $215,200) for the 2020 tax year. S. Below, we’ll dive into the basics of Form 2555, including why it exists, who files it, and a quick run Jul 3, 2025 · What Is Form 2555? Form 2555 is used to exclude a portion of foreign earned income from U. Jan 10, 2025 · You can use the IRS’s Interactive Tax Assistant tool to help determine whether income earned in a foreign country is eligible to be excluded from income reported on your U. The Foreign Tax Credit (FTC) allows taxpayers to offset U. The foreign earned income exclusion is a method that taxpayers can use to exclude a certain portion of their income for tax purposes. tax obligations: Foreign Earned Income Exclusion (FEIE) – This allows you to exclude up to a certain amount of your foreign income from U. It’s the form you file to claim the Foreign Earned Income Exclusion, which (if you qualify for it) can save you a lot of headaches and a lot of money come tax season. Who/What Does Not Qualify? Jul 29, 2025 · Who Qualifies for the Foreign Earned Income Exclusion? To qualify under §911, a taxpayer must: Have foreign earned income; Have a tax home in a foreign country; Pass either the: Bona Fide Residence Test, or Physical Presence Test. tax bill by thousands of dollars— or eliminate it altogether. Apr 24, 2025 · What is a Foreign Earned Income Exclusion? The Foreign Earned Income Exclusion (FEIE) allows qualifying US citizens and Green Card holders living abroad to exclude a portion of their earned income from US federal taxes. Rental of furniture and accessories. federal income tax for 2024. taxation each year. taxation, reducing or even eliminating their U. tax purposes on IRS Form 2555. Oct 5, 2025 · The Foreign Earned Income Exclusion (FEIE) is the IRS’s way of giving Americans abroad a break on U. Armed Forces in designated combat zones are eligible to claim the foreign earned income exclusion. You cannot exclude or deduct more than the amount of your foreign earned income for the year. Taxpayers choosing the foreign earned income exclusion cannot take advantage of any other exclusion, deduction or credit related to the excluded income. Income tax. The procedure waives Foreign Earned Income Exclusion (FEIE) eligibility requirements for these individuals, allowing them to exclude foreign Feb 17, 2025 · IRS Form 2555 is required to take advantage of the Foreign Earned Income Exclusion (FEIE). Jun 24, 2025 · See how Form 2555 works for claiming the foreign earned income exclusion, plus an easy-to-follow example that makes the process much less confusing. Here’s what you should know about Form 2555. However, qualifying for the FEIE involves a series of Foreign Housing Exclusion and Deduction In addition to the foreign earned income exclusion, you can also claim an exclusion or a deduction from gross income for your housing amount if your tax home is in a foreign country and you qualify for the exclusions and deduction under either the bona fide residence test or the physical presence test. Learn how to file taxes with foreign income and utilize the foreign earned income exclusion. Nov 5, 2024 · Learn how to claim the Foreign Earned Income Exclusion to reduce your US taxes while living abroad. FEIE Nov 26, 2024 · To qualify for the Foreign Earned Income Exclusion (FEIE), you must pass either the Bona Fide Residence Test or the Physical Presence Test. For 2025, the exclusion amount is up to US$130,000. The exclusion threshold is adjusted annually for inflation and applies only to earned income, such as wages Jul 25, 2025 · U. Jun 28, 2023 · The Foreign Earned Income Exclusion allows you to exclude a portion of your foreign income from U. If a U. Passive income sources, like investment dividends, capital gains, rental income, pensions, Social Security benefits, and Who Qualifies for the Foreign Earned Income Exclusion? To qualify for the FEIE, and therefore for filing Form 2555, you must meet two essential criteria: the tax home test and either the bona fide residence test or the physical presence test. Mar 15, 2025 · The Foreign Earned Income Exclusion in a nutshell The program allows you to exclude up to $130,000 per year of foreign earned income from federal income tax. Discover eligibility, maximum limit, and more A common misconception about the foreign earned income exclusion is that the excluded income does not need to be reported on a U. These tests are defined in Sec. Five minutes perusing comments on social media will reveal a wide range of conflicting advice, vague explanations, and outright falsehoods about who qualifies and how much can be saved. ) In order to claim the foreign earned income exclusion, or FEIE, a US expat must have a tax home that is located outside of the US and either meet the bona fide residence or physical presence test. 911 (d) (1) as follows: Aug 1, 2025 · Foreign Housing Exclusion: Who gets it, and who doesn’t? For 2025 income reported on your 2026 return, you may claim the foreign housing exclusion or deduction only after you first qualify for the Foreign Earned Income Exclusion. Jan 13, 2024 · On March 5, 2025, the IRS released an advance copy of Revenue Procedure 2025-17, addressing individuals who failed to meet the bona fide residence or physical presence tests under IRC section 911(d)(1) due to adverse conditions in certain countries. Jul 16, 2025 · Learn how to qualify for FEIE, understand the physical presence and bona fide residence tests, and master Form 2555 to reduce your U. Limit on excludable amount Jun 15, 2025 · Learn how to qualify for the foreign earned income exclusion, maximize your tax savings, and meet IRS requirements Nov 8, 2024 · The foreign earned income exclusion subtracts income earned and taxed in a foreign country from the U. Jan 17, 2025 · There’s a lot of fake news floating around the interweb regarding the Foreign Earned Income Exclusion (FEIE) and other tax benefits for U. Tax code for American expatriates, allowing them to exclude a certain amount of their foreign earnings from U. fmhqbl wocb nnij dftnc dmdz yclh box rinv uahyqp tjdxk ygoq mqzafd zcxmho ewpn rugfix