{"id":400,"date":"2016-06-27T09:41:03","date_gmt":"2016-06-27T09:41:03","guid":{"rendered":"https:\/\/directcpa.com\/?p=400"},"modified":"2016-07-20T14:11:16","modified_gmt":"2016-07-20T14:11:16","slug":"u-s-citizen-resident-foreign-earned-income","status":"publish","type":"post","link":"https:\/\/directcpa.com\/pt-br\/u-s-citizen-resident-foreign-earned-income\/","title":{"rendered":"Are You a U.S. Citizen or Resident with Foreign Earned Income?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-437\" src=\"https:\/\/directcpa.com\/wp-content\/uploads\/2016\/06\/stockfresh_2608513_international-traveler-passport_sizeXS-375x250.jpg\" alt=\"International Traveler Passport\" width=\"375\" height=\"250\" data-id=\"437\" srcset=\"https:\/\/directcpa.com\/wp-content\/uploads\/2016\/06\/stockfresh_2608513_international-traveler-passport_sizeXS-375x250.jpg 375w, https:\/\/directcpa.com\/wp-content\/uploads\/2016\/06\/stockfresh_2608513_international-traveler-passport_sizeXS-150x100.jpg 150w, https:\/\/directcpa.com\/wp-content\/uploads\/2016\/06\/stockfresh_2608513_international-traveler-passport_sizeXS-100x67.jpg 100w, https:\/\/directcpa.com\/wp-content\/uploads\/2016\/06\/stockfresh_2608513_international-traveler-passport_sizeXS-200x133.jpg 200w, https:\/\/directcpa.com\/wp-content\/uploads\/2016\/06\/stockfresh_2608513_international-traveler-passport_sizeXS-300x200.jpg 300w, https:\/\/directcpa.com\/wp-content\/uploads\/2016\/06\/stockfresh_2608513_international-traveler-passport_sizeXS.jpg 424w\" sizes=\"auto, (max-width: 375px) 100vw, 375px\" \/>If you are, then this information definitely pertains to you. Apart from domestic earned income, the United States also taxes income earned from foreign countries. The IRS provides a deduction on taxable income for US citizens living and working outside the United States. US citizens and residents living and working outside the United States are allowed an exclusion for wages or income earned from entrepreneurship ventures from a foreign country. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">The foreign earned income exclusion is claimed using the IRS Form 2555 or Form 2555-EZ. These forms must be attached to the IRS Form 1040 that is used to file annual tax returns. Here is a brief rundown of some guidelines that pertain to the United States foreign earned income exclusion package offered by the IRS.<\/span><\/p>\n<p><b>Are you considered a resident in a foreign country?<br \/>\n<\/b><span style=\"font-weight: 400;\">There are two main ways the IRS uses to determine whether a person is qualified for foreign earned income exclusion. The IRS has the Bonafide Residence Test and the Physical Residence Test. \u00a0If you meet the requirements of either then you qualify as a residence in a foreign country and have to report your foreign earned income on your U.S. tax return, and file an FBAR. \u00a0<\/span><\/p>\n<ul>\n<li><b>Bonafide Residence Test<br \/>\n<\/b><span style=\"font-weight: 400;\">United States citizens or residents who meet this requirement are those who have been residing in a foreign country consistently for an entire tax year.<br \/>\n<\/span><\/li>\n<\/ul>\n<ul>\n<li><b>Physical Presence Test<br \/>\n<\/b><span style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A US citizen or resident meets the physical presence test if they have been residing in a foreign country for 330 days or for 12 consecutive months. The 330 days do not have to be consecutive.<\/span><\/span><\/li>\n<\/ul>\n<p><b>Exclusions &amp; Tax Credits<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\"> According to tax regulations the optimum amount of foreign exclusion for every spouse is $ 100,800 annually. <\/span><span style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">After the exclusion has been made, all the foreign tax credits are applied as a credit.<\/span><\/span><\/li>\n<li><span style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"> It is allowed by United States tax regulations to credit taxes paid in a foreign country in order to reduce the annual federal tax requirement. This will require providing your foreign prepared tax return to your U.S. tax preparer substantiating documented account of all the taxes that have been paid in foreign countries.<\/span><\/span><\/li>\n<li><span style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Housing Exclusion: This regulation allows qualified individuals to claim a substantial deduction to accommodate the cost of housing in a country where the income was earned.<\/span><\/span><\/li>\n<li><span style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Persons required by tax regulations to include foreign earned income in tax returns.<\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Any US Citizen or Resident that earns income in a foreign country is required to report their foreign earned income as well as an FBAR, Form 8938 Statement of Specified Foreign Financial Assets and for multinational business owners Form 5472 Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. \u00a0If you earned substantial income in a foreign country then you may have to pay taxes on that money in the U.S. as well. \u00a0Failing to report your foreign earned income from the IRS is considered tax evasion and can be as severe as a criminal offense with jail time.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you have any foreign earned income and need to file a Foreign Bank Account Report, or not sure whether you need to file, give us a call. \u00a0At Rosillo &amp; Associates, we take care of your tax needs for long term financial success.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you are, then this information definitely pertains to you. Apart from domestic earned income, the United States also taxes income earned from foreign countries. The IRS provides a deduction on taxable income for US citizens living and working outside<span class=\"ellipsis\">&hellip;<\/span><\/p>\n<div class=\"read-more\"><a href=\"https:\/\/directcpa.com\/pt-br\/u-s-citizen-resident-foreign-earned-income\/\">Leia mais &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":2,"featured_media":437,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-400","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Are You a U.S. Citizen or Resident with Foreign Earned Income? - Rosillo &amp; Associates<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/directcpa.com\/u-s-citizen-resident-foreign-earned-income\/\" \/>\n<meta property=\"og:locale\" content=\"pt_BR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Are You a U.S. Citizen or Resident with Foreign Earned Income? - Rosillo &amp; Associates\" \/>\n<meta property=\"og:description\" content=\"If you are, then this information definitely pertains to you. 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