The United States taxes citizens and residents on their worldwide income. Citizens and residents living and working outside the U.S. may be entitled to a foreign earned income exclusion that reduces taxable income. For 2012, the maximum exclusion is $95,100 per taxpayer (future years indexed for inflation). In addition, the taxpayer may exclude housing expenses in excess of 16% of this maximum (i.e., $40.11 per day in 2010), but with limits. The exclusion is available only for wages or self-employment income earned for services performed outside the U.S. The exclusion is claimed on IRS Form 2555.
Read more about Foreign Earned Income Exclusion: Qualification, Amount of Exclusion, Form 2555 Required, Additional References
Famous quotes containing the words foreign, earned, income and/or exclusion:
“Most of our occupations are low comedy.... We must play our part duly, but as the part of a borrowed character. Of the mask and appearance we must not make a real essence, nor of what is foreign what is our very own.”
—Michel de Montaigne (1533–1592)
““What have I earned for all that work,” I said,
“For all that I have done at my own charge?
The daily spite of this unmannerly town,
Where who has served the most is most defamed,
The reputation of his lifetime lost
Between the night and morning....””
—William Butler Yeats (1865–1939)
“Some rough political choices lie ahead. Should affirmative action be retained? Should preference be given to people on the basis of income rather than race? Should the system be—and can it be—scrapped altogether?”
—David K. Shipler (b. 1942)
“All men, in the abstract, are just and good; what hinders them, in the particular, is, the momentary predominance of the finite and individual over the general truth. The condition of our incarnation in a private self, seems to be, a perpetual tendency to prefer the private law, to obey the private impulse, to the exclusion of the law of the universal being.”
—Ralph Waldo Emerson (1803–1882)