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Foreign earned income exclusion calculator
Compute the federal tax savings from the Foreign Earned Income Exclusion (FEIE) for US citizens working abroad — earned income up to $126,500 (2024).
Total federal tax saved
Show the work
- FEIE income excluded$95,000
- Housing exclusion$3,760
- Income still US-taxable$0
FEIE — the expat tax shield
US citizens are taxed on worldwide income — but if you live and work abroad, the Foreign Earned Income Exclusion (Form 2555) lets you exclude up to $126,500 (2024) of earned income from US federal tax.
The two qualifying tests
- Physical Presence Test: 330 full days outside the US in a 12-month period
- Bona Fide Resident Test: actual residence abroad for an entire tax year, with foreign tax home
Most short-term expats use Physical Presence. Long-term residents use Bona Fide.
What's excludable
- Earned income (wages, self-employment, salary, bonuses)
- Foreign housing costs over a base amount (location-adjusted; default ~$20k in low-cost areas)
What's NOT excludable
- US-sourced income (still taxed even if you live abroad)
- Investment income (dividends, capital gains, interest) — taxed normally
- Social Security benefits
- Income from US employers paid in US (sometimes still excludable; depends on facts)
- Self-employment tax (15.3% SE tax NOT eliminated by FEIE — common gotcha)
Foreign Tax Credit alternative
Instead of FEIE, you can claim the Foreign Tax Credit (FTC) for taxes paid abroad. Use FEIE in low-tax countries (UAE, Bahamas, Cayman). Use FTC in high-tax countries (Germany, France, UK, Sweden) where you'd already pay foreign tax above what US would charge.
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