Some of you inquired about the foreign earned income tax rules. The rules are very complex, but in this article I have listed a few points to keep in mind as you go through that process with yor accountant tax advisor.
1. Foreign earned income exclusion does not apply to wages and salaries of military and civilian workers employed by the US government.
2. An individual has to meet the physical presence test. This means working out of the USA for at least 330 full days during a 12 consecutive month period.
3. For any day in which part of the day is spent in the USA, this day does not count as being a full day in the foreign country.
4. For any day or time spent over international waters does not count as a qualifying day spent in the foreign country.
5. If you meet the foreign exclusion test, the foreign income earned from the following sources wages, salaries, commissions and professional fees would be considered qualifying income.
6. Dividends, interest. capital gains, pensions, annuities and social security income is excluded as foreign earned income.
