Do I qualify for the Foreign Earned Income Exclusion?
You could if your tax home is in a foreign country and you have foreign earned income. For example, 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 (366-day in leap year). You need to have been outside the United States for at least 330 full days to meet the test.
· The second test is called the Bona Fide Residence (BFR) Test. You meet this test if you are living and working in a foreign country for an entire calendar year (from January 1st to December 31st).
The benefit is you can exclude up to $108,700 of your foreign earnings. This amount is for tax year 2021 (for 2022, it’s $112,000). It gets indexed for inflation annually.
If you are married, your spouse can also exclude $108,700 of foreign earnings provided the requirements mentioned above are met. Together, you and your spouse can exclude as much as $217,400.
Start your expat tax return now from just $298.
What if I’m way behind on my U.S. tax returns?
There is a special IRS program to help you catch up on your U.S. taxes safely, without fines and penalties
It’s for American citizens that didn’t know they had to file U.S. tax returns each year, and have therefore fallen behind. Some more than 30 years! With the IRS Streamlined Procedure, say goodbye to overdue tax returns, late fees, and penalties. If you have children, we can backdate your Child Tax Credit Refund for 3 years.
Get a quote here.