Bona Fide Residence Test

Unlock Your Expat Tax Savings with the Right Residency Qualification

For U.S. citizens living abroad, the Foreign Earned Income Exclusion (FEIE) offers a powerful opportunity to reduce or eliminate U.S. taxes on foreign-earned income. However, to claim this exclusion, you must meet one of two key tests: the Physical Presence Test or the Bona Fide Residence Test.

What is the Bona Fide Residence Test?

The Bona Fide Residence Test is a subjective assessment that evaluates your intention to live abroad permanently or for an extended period. Unlike the Physical Presence Test, which strictly counts travel days, this test considers your overall residency status and ties to a foreign country.

To qualify, you must:

Each case is evaluated individually by the IRS, making it crucial to present a clear and well-documented case for your foreign residency.
Not sure if you qualify? Let’s find out together.

Key Factors the IRS Considers

Intent to Stay
The IRS evaluates whether your stay abroad is temporary or indefinite. Factors such as work contracts, residency status, and long-term plans influence your qualification.
Domicile vs. Residency
Your domicile (permanent home) does not necessarily have to be outside the U.S., but you must prove that your primary residence and life are based in a foreign country.
Foreign Ties
Having a foreign home, bank accounts, tax payments, and community involvement strengthens your case.
Travel Back to the U.S.
Short visits to the U.S. do not automatically disqualify you, but frequent or extended trips may impact your claim.
Employment & Income
Working under a foreign employer, running a business abroad, or paying foreign taxes can help establish residency.
Foreign Housing Deduction
If you qualify for the Bona Fide Residence Test, you may also be eligible for a foreign housing exclusion or deduction, further reducing your tax liability.

Understanding these factors is critical to successfully passing the Bona Fide Residence Test and maximizing your expat tax benefits.

How Form 2555 Helps You Claim the FEIE

To claim the Foreign Earned Income Exclusion, you must file Form 2555, Foreign Earned Income, with your U.S. tax return.
This form provides the IRS with the necessary details to determine if you meet the Bona Fide Residence Test criteria.
Properly completing Form 2555 is essential to avoiding audits, delays, or rejections of your tax exclusion. Our team at eTaxGlobal ensures every section is accurately completed, giving you peace of mind that your claim is legally sound and optimized for savings.

Simplify Your Taxes with eTaxGlobal

Determining whether you meet the Bona Fide Residence Test requirements can be complex, but you don’t have to figure it out alone. At eTaxGlobal, we provide:

Personalized tax strategies tailored to your residency status

Expert guidance from expat tax professionals

Seamless, stress-free filing with no guesswork

With clients in countries worldwide, we’re committed to making expat tax filing easy, accurate, and financially beneficial for you.
Take control of your expat taxes today.