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Calculate your Foreign Earned Income Exclusion eligibility and potential tax savings using the Physical Presence Test. For US citizens and resident aliens living abroad.
Calculate your Foreign Earned Income Exclusion eligibility using the Physical Presence Test.
Max exclusion for 2025: $130,000
The Foreign Earned Income Exclusion (FEIE) is one of the most valuable tax benefits available to US citizens and resident aliens working abroad. It allows qualifying taxpayers to exclude a significant amount of their foreign earned income from US federal income tax.
For the 2024 tax year, the maximum FEIE is $126,500. This amount is adjusted annually for inflation. Combined with the Foreign Housing Exclusion, expats can potentially exclude even more of their income.
To qualify using the Physical Presence Test, you must:
A full day means the entire 24-hour period from midnight to midnight. Days spent traveling over international waters or in international airspace do not count toward the 330-day requirement. Partial days in a foreign country do not count as full days.
One advantage of the Physical Presence Test is flexibility in choosing your 12-month period. It doesn't have to be a calendar year—you can choose any consecutive 365-day period that maximizes your qualifying days.
To claim the FEIE, you must file Form 2555, Foreign Earned Income, with your tax return. This form requires detailed information about your foreign residence, time spent abroad, and foreign earned income.
The FEIE allows qualifying US citizens and resident aliens living abroad to exclude a certain amount of foreign earned income from US taxation. For 2024, the maximum exclusion is $126,500.
The Physical Presence Test requires you to be physically present in a foreign country or countries for at least 330 full days during a consecutive 12-month period. This is one of two ways to qualify for the FEIE.
During your 365-day test period, you can spend up to 35 days in the US (365 - 330 = 35). However, these days must not break your qualifying period, and there may be restrictions on the purpose of your US visits.
Only earned income (wages, salaries, self-employment income, professional fees) qualifies. Passive income like dividends, interest, capital gains, and rental income do not qualify for the exclusion.
Yes, US citizens and resident aliens must file a tax return regardless of where they live if their income exceeds filing thresholds. You claim the FEIE by filing Form 2555 with your return.
The Bona Fide Residence Test is an alternative to the Physical Presence Test. It requires you to be a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year. This test is more subjective and considers factors like intent, ties to the foreign country, and more.