If I make under the foreign earned income exclusion amount, do I need to file a tax return?
When it comes to overseas tax exemptions, if you’re a U.S. citizen working abroad, you must file a U.S. tax return if you meet the filing threshold. Otherwise, you can qualify for the Foreign Earned Income Exclusion.
You may be able to exclude up to $101,300 in foreign earned income, as long as it meets specific requirements. Example: the exclusion does not apply to passive income such as interest and dividends.
If you made less than $10,350 in 2016 and file as single taxpayer, you do not have to file a U.S. tax return. However, if you made more than $10,350, you may qualify for the exclusion on your U.S. tax return.
It’s not automatic. To qualify for any overseas tax exemption, you’ll need to file a U.S. tax return, and you can only claim the exclusion if you file Form 2555 with your return – even if all of your foreign earned income is excludible.
Have more questions about qualifying for the Foreign Earned Income Exclusion? Ready to file? No matter how complicated your U.S. tax return is, there’s an Expat Tax Expert ready to help. Get started with Virtual Expat Tax Preparation.