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File Form 2555 - Foreign Earned Income Exclusion - Foreign Home Exclusion and Deduction
As a US Citizen or resident alien, your worldwide income generally is subject to US Income Tax. Also you are subject to the same income tax filing requirements that apply to US Citizens or resident aliens living in the United States.
A resident alien is a non US Citizen who meets the green card test or the substantial presence test for the Calendar Year.
By Filing Form 2555 you may be able to claim upto $87,500 of your foreign earned income (foreign earned income minus foreign housing exclusion) in 2008.
If both you and your spouse work abroad, you can claim upto $ 171,400 in foreign earned income exclusion.
You can claim Foreign Earned Income Exclusion if you have foreign earned income and meet all the three requirements;
a) Foreign Tax Home
US Citizen or Resident Alien with a Foreign Tax Home. Tax home is the main place or work, business in a foreign country, and not the family home in United States.
b) Bona fide Residence Test
US Citizen or Resident Alien (has Tax treaty benefits or national of the Foreign Country), who is a bona fide resident in a foreign country. Bona fide residence means establishing a presence in a foreign country like extended stay, intention and purpose of your stay like for work or for business.
c) Physical Presence Test
US Citizen or Resident Alien who is physically present in a country for more than 330 days in a year.
Foreign Housing Exclusion and Deduction :
Foreign Housing exclusion applies for amount paid for a house (Rent, Utilities etc.,) in a foreign country, with employer provided funds.
Foreign Housing deduction applies for amount paid for a house in a foreign country, with self-employment earnings like involving in business activities.
If you donot have self employment income, you cannot claim Foreign housing deduction.
File Form 2555 - Foreign Earned Income Exclusion - Foreign Home Exclusion and Deduction
As a US Citizen or resident alien, your worldwide income generally is subject to US Income Tax. Also you are subject to the same income tax filing requirements that apply to US Citizens or resident aliens living in the United States.
A resident alien is a non US Citizen who meets the green card test or the substantial presence test for the Calendar Year.
By Filing Form 2555 you may be able to claim upto $87,500 of your foreign earned income (foreign earned income minus foreign housing exclusion) in 2008.
If both you and your spouse work abroad, you can claim upto $ 171,400 in foreign earned income exclusion.
You can claim Foreign Earned Income Exclusion if you have foreign earned income and meet all the three requirements;
a) Foreign Tax Home
US Citizen or Resident Alien with a Foreign Tax Home. Tax home is the main place or work, business in a foreign country, and not the family home in United States.
b) Bona fide Residence Test
US Citizen or Resident Alien (has Tax treaty benefits or national of the Foreign Country), who is a bona fide resident in a foreign country. Bona fide residence means establishing a presence in a foreign country like extended stay, intention and purpose of your stay like for work or for business.
c) Physical Presence Test
US Citizen or Resident Alien who is physically present in a country for more than 330 days in a year.
Foreign Housing Exclusion and Deduction :
Foreign Housing exclusion applies for amount paid for a house (Rent, Utilities etc.,) in a foreign country, with employer provided funds.
Foreign Housing deduction applies for amount paid for a house in a foreign country, with self-employment earnings like involving in business activities.
If you donot have self employment income, you cannot claim Foreign housing deduction.
| Tax Service | Price | Checklist |
|---|---|---|
| File Form 2555 Learn More | $80 - Buy Gold Tax Service | Checklist |