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2555 Ez instructions Form: What You Should Know
Foreign-Earned Income of a U.S. Citizen or Resident — Exclusion from U.S. Tax You can claim an exclusion for income you earn when you are a U.S. citizen or resident. It's described as foreign earned income. Here are the basic requirements that must be met: You must live in a country in which you were physically present on the day before you filed your return. (See the definition of physical presence in the form and instructions.) Your claim for the exclusion must be reported on or before the day your return is due, even if the period for which you have earned that income expires on the day you file your return. You must file an income tax return of the tax year in which you are claiming your benefit. You may also claim a foreign earned income exclusion in any tax year that includes any part of the tax year before the year in which you first became a U.S. resident or became a citizen or resident. The exclusion is for foreign earned income before additions to income, which are discussed below, were made, and includes amounts that are “succeeding earned income,” as that term is defined in IRC § 6213(c). In addition, your foreign earnings are subject to tax by the foreign nation in which you have earned them, whether you have received foreign tax credit for those amounts. The amount of income subject to the exclusion is based on your total worldwide income. You may deduct, against your income in the year, all amounts from your income that were previously disregarded as foreign earned income and excluded from U.S. income tax by reason of IRC § 6501(a). You don't have to have actually received the foreign earned income and excluded it from income before the beginning of the tax year in which you make a claim for exclusion. If you have already taken into account the income by deducting it and by claiming an exclusion, then there is no further tax to be withheld and paid. There are other limitations on the amount of income included in the exclusion. These limits differ depending on whether the income is earned in the United States or a foreign country. There also are rules covering the amount and type of expenses you may deduct against any income you have earned during the entire year. Exclusion Based on Form 941(F) and Form 941P If you are a U.S.
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