@Red Zee , under the doctrine of income sourced to where work is actually performed, has only a small carve out --- those paid by the US govt. or any of its departments/subsidiaries. Thus even though someone works in Germany, if he/she is paid by the dartment of defense, that income is sourced to the USA and therefore not eligible for "foreign earned income" exclusion. In your case , your income would be considered self-employment sourced to your tax home and therefore eligible for earned income exclusion. Note also that this self-employment income , while being reported on Schedule-C and recognizing deduction of usual/customary /allowable expenses associated with this income stream, is subject to SECA ( equivalent to FICA -- social security & medicare taxes for wage earners) at 15.3% taxes -- reported on Schedule-SE.
Does this answer your query ? Is there more I can do for you ?
pk
