Do you want to take advantage of the Foreign Earned Income Exclusion, the Foreign Housing Exclusion or the Foreign Housing Deduction? As a U.S. citizen or Green Card Holder living abroad, you still need to file annual U.S. federal tax returns. There are many different options, which American abroad has in order to cut the tax bill. However, the 3 above-mentioned ones are based on Foreign Earned Income.

So what is a Foreign Earned Income?

It’s crucial to understand what FEI is for US expats. We prepared this easy infographic to provide more clarity on this topic. The definition by the IRS states that it’s income you receive for services you perform in a foreign country:

Check out the infographic below to understand the classification of types of income and what is considered to be NOT earned income. We also included what the IRS doesn’t count as a Foreign Earned Income.

What is a Foreign Earned Income for US expats infographic

Do you need a help with your tax return? Ask us any questions or book a free 20-min phone consultancy with one of our U.S. international tax experts!

 

Read our FREE U.S. tax guide for Americans abroad

Read our FREE U.S. tax guide for Americans abroad

The only e-book about U.S international taxation, which you need to read as U.S. expat:

1. Learn how to save money and how to use additional tax credits

2. What is the danger of holding Controlled Foreign Corporation?

3. Why more and more people are renouncing U.S. citizenship?

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