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Frequently Asked Tax Questions

Aliens and U.S. Citizens Living Abroad - U.S. Citizens Overseas

  1. I am a U.S. citizen working for a U.S. firm in a foreign country. Is any part of my wages or expenses tax deductible?
  2. I am a U.S. citizen living and working overseas. Can I have a tax credit on my U.S. taxes for the taxes I pay to the foreign country?

Rev. date: 1/1/2011

I am a U.S. citizen working for a U.S. firm in a foreign country. Is any part of my wages or expenses tax deductible?

 
• U.S. citizens and resident aliens are taxed on their worldwide income.
• Some taxpayers may qualify for the foreign earned income exclusion, foreign housing exclusion, or foreign housing deduction, if:
      o Their tax home is in a foreign country,
      o They are U.S. citizens who are a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
      o They are U.S. resident aliens who are a citizen or national of a country with which the United States has an income tax treaty with a nondiscrimination article in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
      o U.S. citizens and resident aliens who are physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
• The taxpayer may be able to claim a foreign tax credit if required to pay a foreign income tax to the foreign country, if he or she has not elected the foreign earned income exclusion with respect to that income.
• The taxpayer may also qualify to deduct away from home expenses (for travel, meals, and lodging), but not against excluded income.

Rev. date: 1/1/2011

I am a U.S. citizen living and working overseas. Can I have a tax credit on my U.S. taxes for the taxes I pay to the foreign country?