U.S. citizens are taxed on their worldwide income.
Some taxpayers may qualify for the foreign earned income exclusion, foreign housing exclusion, or foreign housing deduction, if:
Their tax home is in a foreign country,
They are either a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
They are physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
If the taxpayer is temporarily away from his or her tax home in the United States on business (less than a year), he or she may be able to claim a foreign tax credit if required to pay qualifying foreign tax to the foreign country and would not qualify for the foreign earned income exclusion.
The taxpayer may also qualify to deduct away from home expenses (for travel, meals, and lodging), but not against excluded income.