The Foreign Earned Income Exclusion
If you are one of the many US citizens working and living outside the US, you may have some apprehension about tax season. Living in a foreign country means that you are subject to two sets of laws and two sets of tax codes. To avoid paying taxes on the same income twice, you can claim the Foreign Earned Income Exclusion on your US taxes. It is a hefty exclusion that can help tremendously if you qualify for it. Even semi-permanent jobs might still qualify you for the exclusion. You must be able to prove that you have been living in a foreign country for a certain amount of time to qualify. Foreign Earned Income Exclusion
The Foreign Earned Income Exclusion is for US citizens or US resident aliens whose home country has an established tax treaty with the US. You must have been living in the foreign country for 330 days out of a 12 month period. Some consideration is given to your intentions and the length of time you expect to be in the country. You must apply for the exclusion by filling out IRS tax form 2555. Once it is filed, each case will be considered individually. The IRS will consider your case mostly based on your answers on the form.
Once you have qualified for the exclusion you must either file your taxes by the due date or file an amended return. Amended returns may be filed two to three years after the original was filed. Once your taxes are filed with the Foreign Earned Income Exclusion, the IRS statute of limitations is moved to three years unless there is evidence of fraud. As of 2010, the maximum exclusion was $91,500 for an individual. If your spouse also qualifies for the exclusion, then the amount doubles. (Foreign Earned Income Exclusion)
Qualifying for the Foreign Earned income Exclusion requires either the bona fide residence test or the physical presence test. The bona fide test requires that you prove that you have lived in a foreign country for at least one full tax year. The physical presence test requires that you live in the country for 330 days in a twelve month period. This is regardless of the tax year and begins the day after you move into your residence in the foreign country. Travel outside the country must be limited to 35 days. Any your residence in the country must be of a permanent nature, no touring about the country or staying in temporary residences. (Foreign Earned Income Exclusion
If you are one of the many US citizens working and living outside the US, you may have some apprehension about tax season. Living in a foreign country means that you are subject to two sets of laws and two sets of tax codes. To avoid paying taxes on the same income twice, you can claim the Foreign Earned Income Exclusion on your US taxes. It is a hefty exclusion that can help tremendously if you qualify for it. Even semi-permanent jobs might still qualify you for the exclusion. You must be able to prove that you have been living in a foreign country for a certain amount of time to qualify. Foreign Earned Income Exclusion
The Foreign Earned Income Exclusion is for US citizens or US resident aliens whose home country has an established tax treaty with the US. You must have been living in the foreign country for 330 days out of a 12 month period. Some consideration is given to your intentions and the length of time you expect to be in the country. You must apply for the exclusion by filling out IRS tax form 2555. Once it is filed, each case will be considered individually. The IRS will consider your case mostly based on your answers on the form.
Once you have qualified for the exclusion you must either file your taxes by the due date or file an amended return. Amended returns may be filed two to three years after the original was filed. Once your taxes are filed with the Foreign Earned Income Exclusion, the IRS statute of limitations is moved to three years unless there is evidence of fraud. As of 2010, the maximum exclusion was $91,500 for an individual. If your spouse also qualifies for the exclusion, then the amount doubles. (Foreign Earned Income Exclusion)
Qualifying for the Foreign Earned income Exclusion requires either the bona fide residence test or the physical presence test. The bona fide test requires that you prove that you have lived in a foreign country for at least one full tax year. The physical presence test requires that you live in the country for 330 days in a twelve month period. This is regardless of the tax year and begins the day after you move into your residence in the foreign country. Travel outside the country must be limited to 35 days. Any your residence in the country must be of a permanent nature, no touring about the country or staying in temporary residences. (Foreign Earned Income Exclusion
SHARE
