Independence Expat Tax

​As a US expat, you might be seeking tax advantages for US citizens living abroad. Many US citizens or U.S. resident alien living abroad have worldwide income that will be taxed. The Foreign Earned Income Exclusion (FEIE) Form 2555 can be a valuable US income tax deduction if you meet the requirements. To meet the qualification a few other tax rules do need to consider such as Foreign- Earned Income, Self-Employment Income, Not foreign Earned Income, and Foreign Tax Home


  • US expats or U.S. resident alien remains a bona fide resident in a foreign country for a calendar tax year for example (January 1, 2020, to December 31, 2020). 
  • US expat citizen or U.S. resident alien that is physically present in a foreign country for 330 days within an uninterrupted 12-month period. Expats may make trips back to the US during an continuous 12 months however you cannot exceed more than 35 full days in a given calendar tax year if you want to qualify for the FEIE tax exclusion. 

Thus, if you take trips back to the U.S., we highly recommend keeping records of how many days you have spent in the US. In doing so it should help to limit any big tax surprise when filing your US income taxes for 2020. If you stay over 35 days in the U.S., you will not qualify for the FEIE exclusion. 

Given the situation, with COVID19 many US citizens may have gone back to the US or maybe staying abroad. These unforeseen circumstances might change your qualification for the Foreign Earned Income Tax Exclusion when filing US income taxes Form 1040 on April 15, 2021.  However, the IRS has issued certain guidance to allow for people who were in the USA during COVID19 to still qualify for an exclusion.  This is why it is important to discuss your situation with an expat tax specialist.

Other Rules

Excluded Foreign Earning: As an expat, you might be able to exclude your foreign earnings adjusted annually given inflation. The amount you can exclude is a bit over $100k USD per year of earned income.

Foreign-Earned Income: Any or all amounts of paid personal services you performed such as wages, professional fees, and salaries. 

Self-Employment Income: US expat that qualifies for foreign earned income exclusion or self-employment income may exclude an amount that will reduce your income tax it might not reduce your self-employment tax. The foreign housing deduction may be something you are eligible to claim as opposed to the foreign housing exclusion. 

Not Foreign Earned Income: Not all foreign income is included. The information from the IRS states below what is not considered eligible income. 

  • Pension or annuity payments, including social security benefits.
  • Pay otherwise excludible from income, such as the value of meals and lodging furnished for the convenience of your employer on their premises.
  • Pay for services conducted in international waters or airspace.
  • Pay received as a military or civilian employee of the U.S. government.
  • Payments received after the end of the tax year following the year in which the services that earned the income were performed.

Foreign Tax Home: A US citizen living overseas, you may have purchased a home in a foreign country because you are planning on working for an indefinite amount of time in that country. The IRS refers to these homes as a Foreign tax home. 

Some US citizens keep a home in the U.S. this does not qualify for Foreign tax home exclusion unless you are working for the Armed Forces of the United States or you are working in a declared combat zone.


The Foreign Earned Income Exclusion (FEIE) Form 2555 can be a significant income tax deduction for US expats or U.S. resident alien. Ensuring that you meet the qualification and other rules that may apply to your individual US income tax Form 1040 can be tricky this is why Independence Expat Tax; Certified Public Accountants is such a valuable resource to our clients. 

Online US Expat Tax Preparation Services