Foreign Earned Income Exclusion
In more detail
Form 2555 is the form individuals use to claim the Foreign Earned Income Exclusion. It excludes qualifying foreign earned income, such as wages and self-employment income, from US tax when you meet either the bona fide residence test or the physical presence test. Because it removes income rather than crediting tax, it tends to help most where foreign tax is low. The exclusion involves an election with lasting consequences, and it frequently needs to be weighed against the Foreign Tax Credit for people living in higher-tax countries.
Does Form 2555 apply to your situation?
Cross-border tax turns on the detail of your circumstances. Book a consultation and we'll tell you exactly where you stand.