Foreign Income Tax Calculator

Foreign Earned Income Exclusion (FEIE)

US citizens and resident aliens living abroad can exclude up to $126,500 (2024) of foreign earned income from US taxation using Form 2555.

Qualifying Tests

• Physical Presence Test: Present in foreign country 330 full days in 12-month period
• Bona Fide Residence Test: Established residence in foreign country for full tax year
• Must have tax home in foreign country
• Cannot have abode in the US

What Income Qualifies?

• Included: Wages, salaries, professional fees, self-employment income
• Excluded: Pensions, dividends, interest, capital gains, rental income
• Income must be earned while meeting residence/presence requirements

Foreign Housing Exclusion

• Exclude housing expenses above base amount
• Base amount is 16% of FEIE limit
• Maximum varies by location (high-cost cities get higher limits)
• Includes rent, utilities, insurance, repairs

Foreign Tax Credit (FTC)

• Credit for income taxes paid to foreign governments
• Cannot use FTC on income excluded by FEIE
• Unused credits can be carried back 1 year, forward 10 years
• May be better than FEIE for high-tax countries

FEIE vs FTC: Which to Choose?

• FEIE: Better if living in low/no-tax country
• FTC: Better if living in high-tax country
• Can use FEIE and claim FTC on income above exclusion
• Once you revoke FEIE, must wait 5 years to use it again

Filing Requirements

• US citizens must file US taxes regardless of where they live
• Filing deadline extended to June 15 for expats (October 15 with extension)
• Must file Form 2555 to claim FEIE
• FBAR required if foreign accounts exceed $10,000