If you are a U.S citizen or a resident alien and working abroad, you may be eligible to claim the Foreign Earned Income Exclusion. The IRS allows a U.S. person to claim the exclusion against their foreign earned income up to the threshold limit of $104,100 for 2018. In order to qualify for FEIE, an individual needs to meet either of the one following tests:
- Bona Fide Residency Test
- Physical Presence Test
If you meet either of these tests you may be eligible to claim the exclusion amount in full or up to the limit of your income.
Additionally, if you have housing expenses including rent, utilities, insurance or taxes, a portion may be deductible.