SusanY1
Employee Tax Expert

Deductions & credits

To use the Foreign Earned Income Exclusion (FEIE) you must either meet the Physical Presence Test - which requires that you stay out of the U.S. for 330 days (which are not required to be consecutive) or you must meet the bona fide residence test.  For 2019 it sounds like you do not meet the qualifications to exclude income under the physical presence test. 

 

You may meet the qualifications of a bona fide resident.  Here are those qualifications:

 

  • You must be a U.S. citizen or a U.S. resident alien 
  • You must establish residency in a foreign country for an indefinite or extended period.  (You do not have never to intend to return to the United States.)
  • You may not make any statement to foreign authorities that you are not a resident and that you are not subject to their tax laws.
  • You must reside in a foreign country for an uninterrupted period of time that includes an entire tax year (Jan 1 - Dec 31).  You are allowed to travel out of the country during this time, but you must have clear intention to return to your home in a foreign country.
  • Must be required to pay income tax in the country of residence. (Cannot be exempt, except in some circumstances due to tax treaties.)

If you meet the requirements to be a bona fide resident - here is how to enter it into TurboTax:

  1. Type the search term Foreign Earned Income Exclusion in the search tool (magnifying glass).
  2. Click on the Jump to link in the search results.
  3. Select the income that you wish to report as foreign and enter any supplemental information such as housing.
  4. Indicate whose income you are trying to exclude and answer Yes to the questions "Did you live and work outside of the U.S. in 2019? and "Were you a U.S. Citizen?"
  5. Check the box beside "Is required to pay foreign taxes."
  6. Select the radio button beside Bona Fide Residence Test.
  7. Enter the date you moved to the foreign country - this date can be before 2019. 
  8. Check the box "still living outside of the U.S., or enter the date that you left the foreign country.
  9. Click Continue.
  10. Enter your travel information to the U.S. -here is where you can enter the quarterly trips to the U.S. If you meet all of the criteria for a bona fide resident, the trips will not disallow your exclusion.

 

 

 

 

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