The United States taxes citizens and residents on their worldwide income. Citizens and residents living and working outside the U.S. may be entitled to a foreign earned income exclusion that reduces taxable income.[1][2] For 2024, the maximum exclusion is $126,500 per taxpayer (future years indexed for inflation).[3] Taxpayers filing a joint return are entitled to up to two exclusions if both have earned income. In addition, the taxpayer may exclude housing expenses in excess of 16% of this maximum ($55.30 per day in 2024) but with limits.[4]
The exclusion is available only for wages or self-employment income earned for services performed outside the U.S. The exclusion is claimed on IRS Form 2555.
- ^ "Foreign Earned Income Exclusion". IRS. Retrieved 2023-01-17.
- ^ "26 U.S. Code § 911 - Citizens or residents of the United States living abroad U.S. Code". Cornell Law School. Retrieved 2021-01-31.
- ^ "IRS provides tax inflation adjustments for tax year 2024". Internal Revenue Service. 9 November 2023.
- ^ "Foreign Housing Exclusion or Deduction". Internal Revenue Service. 23 May 2023.