• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • facebook
  • twitter
  • youtube
  • instagram
  • yelp

Subsidiary of EtaxService.com | Support Hotline: 877-ETAX-123 | 877-382-9123

Expatriate Tax Returns

Expatriate Tax Returns

  • Home
  • About Us
    • Expatriate FAQ for Tax Filing
    • Testimonials
    • Leave a Comment
  • Services
    • Individual Tax Returns
    • Business Tax Returns
    • Estates and Trusts
    • FBARS and FORM 8938
    • Non-Filers and Late Filers
    • Audit Assistance
    • What We Need
  • Pricing
    • Privacy/Payment Policies
  • Tax Resources
    • Tax Forms and Documents
    • Expat White Paper
    • Expat Tax Guide
  • Blog
  • Contact Us
  • Pay Bill

Foreign Income Exclusion

November 6, 2013

Let’s Talk About the Foreign Income Exclusion!

 

We are often asked questions regarding the foreign income exclusion and what type of income can be excluded.  As the name of the benefit applies, “earned income” is excluded…but the IRS definition may be very different from what you may assume.

First, in order to qualify for the “foreign earned income exclusion”, it is all about where you live and how long you live there.   You must reside in a foreign country and you must live there for a minimum of 330 days within a 365 window of time. The income does not have to be foreign or earned from a foreign employer, nor does it apply to foreign income earned while you live in the US.

Second, it must be “earned income”, as defined in the IRS regs, that is: wages, salaries, professional fees, commissions, tips.  “Investment” and “other” income such as interest, dividends, capital gains, gambling winnings, alimony, social security benefits, pension retirement/annuity distributions, rents, royalties and K-1 income are considered “unearned” or “variable” income and are all fully taxable, even if you meet the foreign residency requirements.

The term “earned income” can also include amounts paid to you as allowances or reimbursements for the following items:  cost of living, overseas differential, education, home leave, living quarters, moving expenses which are job related.

For 2012 the maximum amount for the Foreign Earned Income Exclusion under the Internal Revenue Code is at $95,100 (for 2013 it is $97,200).

To claim this exclusion you must attach form 2555 to a timey filed US tax return.  The application for this exclusion is voluntary, but once made, must be used for five years if you have income earned while abroad.

Still have questions? Please contact us and we can help you decide if  this exclusion makes the most sense considering your individual tax situation.

Share this:

  • Facebook
  • Twitter
  • LinkedIn

Filed Under: Blog Tagged With: Expat Filing Requirements, expat tax information, Expat Tax Preparation

Primary Sidebar

Blog Archive

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 1,841 other subscribers

Footer

Contact Information

Expatriate Tax Returns
Phone: 1-877-ETAX-123 (382-9123)
Fax: 561-516-6261

Corporate Office (Florida)
7865 Palencia Way, Delray Beach, FL 33446

Satellite Office (Michigan)
20164 Goddard Rd, Taylor, MI 48180

Satellite Office (UK)
16 Malvern Court, Onslow Square
London, UK SW7 3HU

Contact Us

Refer A Friend

Services

  • Individual Tax Returns
  • Business Tax Returns
  • Estates and Trusts
  • FBARS and FORM 8938
  • Non-Filers and Late Filers
  • Audit Assistance
  • What We Need

Latest News

The Importance Of Form 8992: A Guide For Taxpayers

How to Deal With Your Taxes When You Are Unemployed

Expatriate Tax Returns Wishes you a Happy New Year 2023

Copyright © 2023 Expatriate Tax Returns · Privacy Policy · Site by OMA Comp
Subsidiary of EtaxService.com