2020 Taxes - Foreign Earned Income Exclusion (Form 2555)
A couple of you have already messaged me regarding the yearly increase of the Foreign Earned Income Exclusion (Form 2555), so here's a quick blog post with the FEIE basics for the 2020 tax year. Adjusted annually for inflation, the maximum foreign earned income exclusion amount for the 2020 tax year will be $107,600 per person (up from $105,900 for the 2019 tax year). Married couples who both qualify as per either the bona fide residence test or physical presence test can exclude up to $215,200 of foreign earned income for the 2020 tax year. Please keep in mind that qualification to use this exclusion is based on a rolling 12 month period (not a calendar year), therefore you may qualify to use the exclusion for part of a given tax year and therefore must adjust the maximum limit to reflect the total qualifying days int he tax year. If you're unsure of whether or not you qualify to use the foreign earned income exclusion, how you can best combine this exclusion with a foreign tax credit, or anything else, please do not hesitate to get in touch.