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New Member
posted Jun 6, 2019 12:40:05 PM

I made 97K of Foreign Earned Income, yet the Exclusion only qualified 49K of it. Why?

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1 Best answer
New Member
Jun 6, 2019 12:40:05 PM

Your Foreign Earned Income exclusion is calculated by the days you were working in the foreign country. Check the number of days you entered on Line 38 of Form 2555 (you will have to view your return and Form 2555). If it is less than 365, your exclusion is prorated according to a percentage (days you entered on Line 38 divided by 365).

On Part VIII, Line 38, you enter the number of days in your qualifying period that fall within your 2017 tax year. Line 38 number of days is divided by 365 days which comes up with a percentage. That percentage is multiplied by the $102,100 full exclusion amount.

Your qualifying period is the period during which you meet the tax home test and either the bona fide residence or the physical presence test. 

Also, check Part III Line 10 bona fide residence test days or Part III Line 16 Physical presence test days.

If that is not the problem, please reply in the comment section.

2 Replies
New Member
Jun 6, 2019 12:40:05 PM

Your Foreign Earned Income exclusion is calculated by the days you were working in the foreign country. Check the number of days you entered on Line 38 of Form 2555 (you will have to view your return and Form 2555). If it is less than 365, your exclusion is prorated according to a percentage (days you entered on Line 38 divided by 365).

On Part VIII, Line 38, you enter the number of days in your qualifying period that fall within your 2017 tax year. Line 38 number of days is divided by 365 days which comes up with a percentage. That percentage is multiplied by the $102,100 full exclusion amount.

Your qualifying period is the period during which you meet the tax home test and either the bona fide residence or the physical presence test. 

Also, check Part III Line 10 bona fide residence test days or Part III Line 16 Physical presence test days.

If that is not the problem, please reply in the comment section.

New Member
Jun 6, 2019 12:40:06 PM

Thank you!  This is EXACTLY what I needed.