Get 2011 Form 2555

You need to file IRS form 2555 if you want to claim the Foreign Earned Income Exclusion. The FEIE is available to expats who either: Work outside the U.S. as employees, whether for a U.S. or non-U.S. employer. Work outside the U.S in a self-employed or partner capacity.

File Form 1116, Foreign Tax Credit, to claim the foreign tax credit if you are an individual, estate or trust, and you paid or accrued certain foreign taxes to a foreign country or U.S. possession.

To meet this test, you must be a U.S. citizen or resident alien who is physically present in a foreign country, or countries, for at least 330 full days during any period of 12 months in a row. A full day means the 24-hour period that starts at midnight.

You cannot claim both the Foreign Tax Credit (Form 1116) and the Foreign Earned Income Exclusion (Form 2555) on the same dollar of income. If you exclude the income form your tax return, you cannot also claim a credit on that same income.

TIMELY FILING THE FORM 2555 Once you choose to claim an exclusion, the choice remains in effect for that year and all future years unless it is revoked. However, you need to include the form each year with your tax return in order to claim the benefit of that year.

The Form 2555-EZ will no longer be available to make the election to exclude foreign earned income and the foreign housing cost amount. Exclusion amount. For 2019, the maximum exclusion amount has increased to $105,900.

However, you may qualify to exclude from income up to an amount of your foreign earnings that is now adjusted for inflation ($91,400 for 2009, $91,500 for 2010, $92,900 for 2011, $95,100 for 2012).

The FEIE is generally best for taxpayers whose income is earned in a low- or no-income tax country. It will allow them to shield up to $112,000 (2022 figure) from U.S. taxation, while the Foreign Tax Credit would have little or no benefit since they are in a low- or no-income tax country.

More In Forms and Instructions If you qualify, you can use Form 2555 to figure your foreign earned income exclusion and your housing exclusion or deduction. You cannot exclude or deduct more than your foreign earned income for the year.