Rev. date: 01/11/2013
In preparing your U.S. income tax return, U.S. citizens and residents working abroad must correctly report their income and calculate their deductions and
credits.
- U.S. citizens and resident aliens are taxed on their worldwide
income.
- You must report your wages and other earned income on the correct lines of your
Form 1040 (PDF).
- Some taxpayers may qualify to exclude a limited amount of their foreign earned income and either claim the housing exclusion or deduction. To qualify:
- Their tax home must be in a foreign country, and either:
- They must be 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;
- They must be U.S. resident aliens who are a citizen or national of a country with which the United States has an income tax treaty and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year;
or
- They must be 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.
- Taxpayers 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.
- Taxpayers may also qualify to deduct away from home expenses (for travel, meals, and lodging), but not against excluded
income.
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