The foreign earned income exclusion allows you to exclude income you earned from your annual taxes. If you meet certain requirements, you may qualify for the foreign earned income and foreign housing exclusions, as well as the foreign housing deduction.

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude income you earned while you lived and worked abroad up to ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.

The foreign housing exclusion and the foreign housing deduction are based on foreign earned income. For this purpose, foreign earned income is income you receive for services you perform in a foreign country during a period your tax home is in a foreign country and during which you meet either the bona fide residence test or the physical presence test.

 To determine whether you can claim the Foreign Earned Income Exclusion or deduction please begin with question 1:

1.  Do you have foreign earned income? 
        a.  Yes. Go to question 2.
        b.  No. You CANNOT claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction.
2.  Is your tax home in a foreign country?
        a.  Yes. Got to question 3.
        b.  No. You CANNOT claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction.
3.  Are you a U.S. citizen?
   a.  Yes. Go to question 4.
        b.  No. Are you a U.S. resident alien?
4.  Yes. Are you a citizen or national of a country with which the United States has an income tax treaty in effect?
                  o  Yes. Go to question 4.
                  o  No. Go to question 5.
5.  No. You CANNOT claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction.
6.  Were you a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year?
       a.  Yes. You CAN claim the foreign earned income exclusion and the foreign housing exclusion or the foreign housing deduction.
        b.  No. Go to question 5.
7.  Were you physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months?
       a.  Yes. You CAN claim the foreign earned income exclusion and the foreign housing exclusion or the foreign housing deduction.
        b.  No You CANNOT claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction.

For assistance in claiming the Foreign Earned Income Exclusion and filing the necessary forms with your annual tax return, please contact us!