Here’s a surprising fact: Uncle Sam gives a whopper of a tax break to people who live and work abroad.
If you qualify for this break, you can totally avoid federal income taxes on up to $101,300 of 2016 earned income and, in addition, qualify for a housing exclusion of up to 30 percent of the $101,300. Both wage and self-employment income can qualify for the “living abroad” tax breaks.
During recent years, lawmakers have made this juicy tax benefit more complicated. Of course, if you are living in a dream location and paying zero or little taxes, you may think the trouble it takes to get this right is nothing more than a simple annoyance.
And if you’re married and both you and your spouse have income from living abroad, you can each qualify for the tax breaks.
To qualify for this tax break, called the foreign earned income exclusion, and avoid the pitfalls when using it, you have to (a) be a “qualified individual” and (b) have foreign earned income. ... Log in to view full article.