What does Foreign Earned Income Exclusion (FEIE) mean?
Foreign Earned Income Exclusion (FEIE) is a tax provision that allows U.S. citizens and resident aliens living and working abroad to exclude a certain amount of their foreign-earned income from U.S. taxes. The FEIE helps expatriates and international workers reduce their tax liability while working outside the U.S. The amount excluded is subject to change each year and is determined by the IRS. To qualify, individuals must meet specific residency or physical presence requirements.
Example:A cinematographer working on a film set in France qualifies for the FEIE, allowing them to exclude a portion of their foreign income from U.S. taxes.
Example: A U.S. actor working abroad in Canada for several months meets the physical presence test, making them eligible for the FEIE.
Did You Know?
The Foreign Earned Income Exclusion amount is adjusted annually by the IRS, and in 2023, individuals could exclude up to $120,000 of foreign-earned income!
