Foreign-earned income: Foreign-earned income means wages, salaries, professional fees, or other amounts paid to you for personal services rendered by you. Self-employment income: A qualifying individual may claim the foreign earned income exclusion on foreign earned self-employment income.

Can I exclude income earned in a foreign country?

If your tax home is in a foreign country and you meet the bona fide residence test or the physical presence test, you can choose to exclude from your income a limited amount of your foreign earned income. You can also choose to exclude from your income a foreign housing amount.

How does foreign earned income work?

For this purpose, foreign earned income is income you receive for services you perform in a foreign country in a period during which your tax home is in a foreign country and you meet either the bona fide residence test or the physical presence test.

How do I declare foreign income on my tax return?

Generally, you report your foreign income where you normally report your U.S. income on your tax return. Earned income (wages) is reported on line 7 of Form 1040; interest and dividend income is reported on Schedule B; income from rental properties is reported on Schedule E, etc.

How do I report foreign earned income?

Who is required to have foreign earned income?

You must have foreign-earned income. A U.S. citizen who is a bona fide resident of a foreign country for an entire tax year A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country for an entire tax year, or

Do you pay taxes on income earned in a foreign country?

You can use the IRS’s Interactive Tax Assistant tool to help determine whether income earned in a foreign country is eligible to be excluded from income reported on your U.S. federal income tax return. If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income.

What are the tax rules for Americans who work abroad?

Many Americans who live and work abroad qualify for the foreign earned income exclusion, which provides that the first $105,900 of foreign wages or self-employed income is excluded from U.S. federal income taxes as of the 2019 tax year.

What is the foreign earned income exclusion for 2020?

The Foreign Earned Income Exclusion (FEIE, using IRS Form 2555) allows you to exclude a certain amount of your FOREIGN EARNED income from US tax. For tax year 2020 (filing in 2021) the exclusion amount is $107,600.