As a U.S. citizen, your tax obligations don’t disappear when you move overseas. However, the Foreign Earned Income Exclusion (FEIE) allows you to exclude up to $126,500 (for 2024) of your foreign-earned income from U.S. taxation—potentially saving you thousands.
At eTaxGlobal, we help expats navigate the complexities of the FEIE, ensuring you qualify, maximize your savings, and remain fully compliant with U.S. tax laws.
The FEIE applies to earned income—including wages, salaries, and self-employment income—but not to unearned income such as interest, dividends, rental income, or capital gains. Whether you work for a foreign company, a U.S. company while living abroad, or are self-employed, this exclusion can provide significant tax relief.
Spend at least 330 full days within a 365-day period in a foreign country. This period can be adjusted to align with your tax filing date, giving you flexibility. Keep in mind that an extension to file does not extend your time to pay—90% of your taxes must be paid by April 15th to avoid penalties.
Establish a permanent residence in a foreign country and live there for a full calendar year with no immediate plans to return to the U.S. permanently.
Not sure if you qualify?
In addition to the FEIE, you may be able to exclude or deduct a portion of your foreign housing expenses—covering rent, utilities, and other housing costs.
The standard foreign housing exclusion is about one-third of the FEIE.
For high-cost cities like Tokyo for example, the exclusion can be as high as $128,000, leading to even greater tax savings.
To claim the Foreign Earned Income Exclusion, you must file Form 2555 with your U.S. tax return. This form helps the IRS determine your eligibility and ensures you receive the maximum tax benefits.
The FEIE can significantly reduce your U.S. tax bill, but navigating the rules can be tricky. Our team of international tax experts ensures you qualify for every deduction, exclusion, and credit available—so you never overpay.
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