Expat Specific Language

Foreign earned income is income from services performed abroad that you actively worked for (i.e. as an employee, self-employed). Foreign investment income does not count!

Learn more about foreign sourced income.

Was this Article helpful?

Do you need to make up years of back taxes? Maybe a couple of FBARs or two? No worries because the Streamlined Procedure can help you get back on track, IRS penalty-free.

In 2014 the IRS developed the Streamlined Procedure to help US expats catch up on taxes without being subject to penalties. This program also allows you to file amended returns, and claim missed returns on qualified foreign pension plans.

To be eligible for the Streamlined, you need to:

  • Not live in a home within the United States for the last three years
  • Lived physically outside the United States for at least 330 days
  • Did not file a US federal tax return, delinquent, or amended returns for the last three years
  • Have not filed the FBAR in at least six years

Try the MyExpatTaxes Streamlined Filing Procedure and file 3 years of tax returns and 6 FBARs without any failure-to-file or FBAR penalties.

Was this Article helpful?

The Physical Presence Test is one of two tests you take to determine your eligibility for the Foreign Earned Income Exclusion.

To pass the Physical Presence Test, you need to be outside of the United states for 330 full days within a consecutive 12-month period - beginning or ending in the tax year.

Depending on your qualifying period, you may have to prorate (allocate/distribute) the maximum FEIE amount you can take. 

Was this Article helpful?

Expats who pass the Bona Fide Residence Test are eligible for tax exclusions and benefits like:

  • The Foreign Earned Income Exclusion
  • The Foreign Housing Exclusion and/or
  • The Foreign Housing Deduction

Who is eligible for Bona Fide Residence Test? 

  • US citizens/US resident aliens who are residents of a foreign country that has an income tax treaty with the US
  • Expats who have an established residence in a foreign country.
  • Expats who have been living within the host country for an entire tax year (January 1-December 31)
  • Expats who have no plans to move back to the US soon

Who is Not Eligible?

The following reasons are why someone could not be eligible for the Bona Fide Residence Test:

  • You tell the foreign authorities that you are not a resident of your host country
  • The foreign government does not make you subject to their country’s taxes, or 
  • The foreign authorities have not finalized your tax status and/or foreign residency within the country

Learn more about the Bona Fide Residence Test.

Was this Article helpful?

Essentially, the FEIE is Form 2555 on a US tax return. It allows any qualifying and taxpaying American expat to exclude around 100k of foreign earned income from being taxed from the IRS tax authorities. The income must be earned (i.e. salary or self-employment) while you were physically working outside of the US.

Learn more about the Foreign Earned Income Exclusion.

Was this Article helpful?

The FTC, or Foreign Tax Credit is an expat tax benefit that gives you a dollar-for-dollar reduction towards your foreign earned income. For example, if you paid 100 Euros to the Dutch government as a resident of the Netherlands you can take a 100 US dollar credit and apply it to any US taxes you owe.

Learn more about the Foreign Tax Credit.

Was this Article helpful?

Any financial account (bank, pension, investment vehicle, etc.) that is located outside of the U.S.

Was this Article helpful?

Freaking out because you didn't know you had to file your US taxes abroad?

The Streamlined Filing Compliance Procedure allows you to catch up with your taxes by just filing three back years of tax returns + six back years of FBAR (as applicable). We support this program easily within our app! Learn more about the Streamlined Procedure.

Was this Article helpful?

Generally, the Foreign Tax Credit allows you to get a $ for $ (euro, pound, yen, etc.) credit from the income taxes paid to your host country against your US tax liability. Learn more about the Foreign Tax Credit.

Was this Article helpful?

Other Tax Refunds, Credits & Things to be aware of

Yes! The Foreign Housing Exclusion allows you to deduct the excess of housing expenses, paid by employer-provided amounts that are over 16% of the FEIE amount of that year. Be aware though, there is a limit to how much foreign housing expenses you can deduct.

Using this housing exclusion can help, especially if you earn more than the maximum FEIE allowed amount. The Foreign Tax Credit can also be a huge help, which is also supported by the MyExpatTaxes tax software.

In addition to rent as a qualified expense for the Foreign Housing Exclusion, the following are also applicable:

  • home utilities (think electricity)
  • personal property insurance
  • accessory rentals
  • household repairs

To input it in our software, you’ll see just need to select the “Housing Expenses” section in the navigation panel:

deduct my housing expenses

foreign housing deductions myexpattaxes

Was this Article helpful?

Usually, when you file a US tax return, you’ll be asked to provide your US banking details, which is where the IRS direct deposits any refunds you may have. If you do not have any US bank account, we recommend creating a virtual account with Wise. Otherwise, the IRS will send your stimulus checks as a paper check by mail to the address indicated on your last tax return.

Was this Article helpful?

A tax credit for certain people who work, meet certain requirements, and have earned income under a specified limit. This credit is not generally applicable for U.S. Expats due to a number of reasons but in rare cases, you can receive a nice refund if you’re earning below the threshold and meet other requirements. MyExpatTaxes will sort this out for you!

Was this Article helpful?

The Basics (In case you need a refresher)

Expats who pass the Bona Fide Residence Test are eligible for tax exclusions and benefits like:

  • The Foreign Earned Income Exclusion
  • The Foreign Housing Exclusion and/or
  • The Foreign Housing Deduction

Who is eligible for Bona Fide Residence Test? 

  • US citizens/US resident aliens who are residents of a foreign country that has an income tax treaty with the US
  • Expats who have an established residence in a foreign country.
  • Expats who have been living within the host country for an entire tax year (January 1-December 31)
  • Expats who have no plans to move back to the US soon

Who is Not Eligible?

The following reasons are why someone could not be eligible for the Bona Fide Residence Test:

  • You tell the foreign authorities that you are not a resident of your host country
  • The foreign government does not make you subject to their country’s taxes, or 
  • The foreign authorities have not finalized your tax status and/or foreign residency within the country

Learn more about the Bona Fide Residence Test.

Was this Article helpful?

The FTC, or Foreign Tax Credit is an expat tax benefit that gives you a dollar-for-dollar reduction towards your foreign earned income. For example, if you paid 100 Euros to the Dutch government as a resident of the Netherlands you can take a 100 US dollar credit and apply it to any US taxes you owe.

Learn more about the Foreign Tax Credit.

Was this Article helpful?

The end result of a quite complicated math equation (we handle this for you!) to understand how much of your gross income is actually taxable to the U.S. This includes all forms of gross income, then takes into account adjustments, deductions and expat only exclusions.

Was this Article helpful?

Like dinosaurs, these use to exist but no longer do in 2018!

In 2017 and prior, you would get an additional "buffer" to lower your tax bill depending on how many people you're financially responsible for.

Was this Article helpful?

The IRS provides a standard deduction (i.e. up to that amount of gross income is tax-free) or you can itemize expenses to lower your tax bill. The 2018 standard deduction amounts are:

  • Single or married filing separately: $12,000
  • Married filing jointly or Qualifying widow(er): $24,000
  • Head of household: $18,000

Was this Article helpful?

  • Single self-explanatory
  • Head of Household you have a qualifying dependent and are not married
    OR you are married to a non U.S. citizen and are paying for more than half of the costs to keep up your shared home.
  • Married Filing Jointly you are filing with your spouse, who has either a SSN or ITIN
  • Married Filing Separately you are married but choose not to file with your spouse, either because they are not a U.S. citizen and would rather not sign up with the IRS or they are filing their own U.S. return.
  • Qualifying Widow: you have a qualifying dependent, your spouse has passed away two years ago or less and you have not remarried
    (we are sorry for your loss... let us at least help make sure your tax return is optimized).

Was this Article helpful?

Filing requirements and thresholds depends on your age, type, level of your income, as well as your marital status.

If you have gross income* which goes over the filing status threshold amount below, then you are legally obligated to file your annual US tax return.

  • Single: $12,400 if under age 65
  • Married filing jointly: $28,400 if both spouses under age 65
  • Married filing separately — $5 for all ages: Yes, if you are married to a non U.S. citizen, who does not want to sign up with the IRS so that you can file as "married filing jointly," then you probably need to file if you have income. And yes, $5 is a very low threshold.
  • Head of household:$18,650 if under age 65
  • Self-employed: If you had net earnings from self-employment of at least $400.

*Gross income includes everything from salary, unemployment compensation, investment income, pension income, etc.

Learn more about expat tax filing requirements on our expat tax guide.

Was this Article helpful?

Log in to get in touch with our Support Team

Help Center Topics

Search FAQs