You can get exclusions like foreign earned income exclusion, foreign housing exclusion, and other deductions, etc.
The amount for foreign earned income exclusion is adjusted annually for inflation.
To get these exclusions you must have:
- Foreign earned income.
- Your home tax must be in a foreign country.
You also need to be one of the following:
- A U.S. citizen who is a bonafide resident of a foreign country for the entire tax year.
- A resident alien who is a citizen or national of a foreign country that has an income tax treaty with the U.S. and is a resident of the same country for an entire tax year.
- A U.S. citizen or resident alien who is physically present in a foreign country for 330 days.
Note: Even if you don’t have to pay taxes you’ll have to file your expat tax returns.
Get in touch with us to know more about expat tax exclusion, as the FEIE may not be the most tax efficient way of doing things.
Once you start using FEIE, you may be stuck with using that method for the next five years whilst leaving valuable foreign tax credits unused! Ask a tax professional in the know who can take the guesswork out of the process!