I am an expat with foreign earned income above the FEIE but below the additional standard deduction (about 112,000). Should I avoid the standard deduction so that I can contribute to the Roth IRA? Can I take a partial standard deduction so that I only pay tax on the amount I contribute to the Roth IRA? Do you know which US firms allow expats to open IRAs?
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The standard deduction cannot be taken partially AND it has nothing to do with having qualifying earned income for a ROTH contribution.
Are you referring to the maximum foreign earned income exclusion on Form 2555 line 37 ($105,900 for 2019)? You are not permitted to use a lower maximum exclusion amount. If you qualify and exclude foreign earned income, you must exclude all of the income permitted to be excluded.
If you have $112,000 of foreign earned income and exclude the maximum, you still have about $6,100 of earned income not excluded to be able to contribute to a Roth IRA. However, you still have to consider whether or not the combination of your modified AGI for the purpose and your filing status limits your permissible Roth IRA contribution. Excluded foreign earned income is added back to AGI in determining modified AGI.
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