Foreign Earned Income Exclusion
Contents
Navigating the Foreign Earned Income Exclusion: A Comprehensive Guide
Understanding the intricacies of the Foreign Earned Income Exclusion (FEIE) is crucial for individuals living and working abroad. This comprehensive guide delves into the nuances of FEIE, its eligibility criteria, calculation methods, and practical implications for taxpayers.
Decoding the Foreign Earned Income Exclusion: A Detailed Overview
Eligibility for Foreign Earned Income Exclusion
To qualify for the FEIE, individuals must meet specific criteria outlined by the Internal Revenue Service (IRS). These criteria include being a U.S. citizen or resident alien, maintaining a bona fide residency or physical presence in a foreign country, and earning foreign income subject to taxation.
Understanding Foreign Housing Amount
In addition to the maximum exclusion amount, taxpayers may also claim a foreign housing amount to offset housing costs incurred abroad. This amount is calculated based on the percentage of qualifying days spent in a foreign country and is subject to certain limitations and adjustments.