Foreign Earned Income Exclusion 2018

Foreign earned income exclusion 2018. Active income is what puts the earned in the foreign earned income exclusion. Mp s 2018 foreign housing amount is 15 040. 5 best foreign earned income exclusion qualification steps for 2018 and beyond step 1. Here is the relevant portion of sec.

The foreign earned income exclusion excludes income earned and taxed in a foreign country from the u s taxable income of american expats. For purposes of this section. The amount of exclusion that a taxpayer is entitled to is equal to the lesser of foreign earned income for the year or the maximum exclusion divided by the total number of days 365 or 366 in the year times the number of qualifying days. Citizen who is a bona fide resident of a foreign country or countries for an.

The maximum exclusion is 105 900 for tax year 2019 future years indexed for inflation. As discussed above in oder to qualify for the foreign earned income you must meet either the bona fide resident test or the physical presence test. If you meet certain requirements you may qualify for the foreign earned income exclusion the foreign housing exclusion and or the foreign housing deduction to claim these benefits you must have foreign earned income your tax home must be in a foreign country and you must be one of the following. D definitions and special rules.

This is income you are actively working towards earning whether it is from wages you earn at a job self employment income you receive while working in a foreign country a salary you are paid by an employer or your own business or a bonus you get as an. Here s what you need to know about the foreign earned income exclusion for 2018 and how it might be affected by president trump s residency based tax proposal. If you re living and working abroad the foreign earned income exclusion is your first and best defense against the irs and the most important tool in your expat tax toolbox. Under section 911 of the us tax code the foreign earned income exclusion for 2018 increases from 102 100 in 2017 to 104 100 in 2018.

The feie for 2018 is a nice bump up from 2017. This is the 103 900 maximum foreign earned income exclusion for 2018 minus the 90 000 you already excluded for that year. However the minimum time requirement can be waived if you must leave a foreign country because of war civil unrest or similar adverse conditions in that country. You must include the remaining 6 100 in income for 2019 20 000 13 900 because you could not have excluded that income in 2018 if you had received it that year.

Income that you earn from sources within such a country for services performed during a period of violation does not qualify as foreign earned income.