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. This provision is designed to reduce the impact of double taxation for expats who earn income in a foreign country.
To claim, the income must be earned (i.e. salary or self-employment) while you were physically working outside of the US, your tax home must be in a foreign country, and you must meet one of the following:
- Bona Fide Residence Test: You must be a full-time resident of a foreign country for the entire calendar year.
- Physical Presence Test: You must be physically present outside the U.S. for at least 330 days within any 12-month period.
Learn more about the Foreign Earned Income Exclusion for Expats.