If you are a United States citizen or a resident alien who lives and
works abroad, you may qualify to exclude all or part of your foreign
earnings from your income. If you are a U.S. citizen with a tax home
in a foreign country and you meet the bona fide residence test or
physical presence test, you may exclude up to $70,000 of foreign
earned income each year. Resident aliens with a tax home in a foreign
country may be eligible for the exclusion if they meet the physical
presence test, or if they are citizens or nationals of a country with
which the United States has an income tax treaty and meet the bona
fide residence test. Specific guidelines for these two tests are
covered in Topic 854. The maximum annual exclusion is prorated on a
daily basis if there is any part of your year that you do not qualify
under either test.
If you qualify under either test, you may also claim an additional
exclusion or deduction, based upon what you spend for foreign
The foreign earned income exclusion and the foreign housing exclusion
or deduction are figured on Form 2555, which you attach to Form 1040.
However, if you claim only the foreign earned income exclusion, you
may be able to use Form 2555-EZ instead.
If you would like more information on who qualifies for the
exclusion, read Topic 854. For more information on what type of
income qualifies for the exclusion, read Topic 855.
You may wish to refer to Publication 54, Tax Guide for U.S. Citizens
and Resident Aliens Abroad.
If the information you need relating to this topic is not addressed
in Publication 54, you may call the IRS National Office hotline. The
number is (202) 874-1460. This is not a toll-free number.
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