How to Complete IRS Form 2555 - Foreign Earned Income Exclusion

No video

How to Complete IRS Form 2555 - Foreign Earned Income Exclusion

Рет қаралды 16,461

Күн бұрын

A U.S. citizen living abroad is still required to file an annual Form 1040 tax return and pay taxes on their worldwide gross income. However, they might be eligible to exclude their foreign earned income from gross wages.
In this video, I cover a simple example where a U.S. citizen moves to a foreign country on a temporary work permit, and is eligible to file Form 2555 with his tax return to exclude his salary from U.S. taxable income.
Here are some additional videos covering issues for U.S. expats:
Form 2350 (Additional Extension): • IRS Form 2350 Extensio...
Form 673 (Withholding Exemption): • How to Complete IRS Fo...
Form 8938 (Foreign Assets): • How to Complete IRS Fo...
FBAR FinCEN Form 114: • How to Fill Out FBAR (...
Taxes on Foreign Income: • Do I Pay U.S. Taxes on...
For a larger database of tutorials, please visit our website and search for your question:
knottlearning....
DISCLAIMER: The information provided in this video may contain information about tax, financial, and legal topics. Such materials are for informational purposes only and may not reflect the most current developments. These informational materials are not intended and should not be taken as tax, financial, or legal advice. You should contact an advisor to discuss your specific facts and circumstances. Self-help services may not be permitted in all states or jurisdictions. The use of these materials does not create an attorney-client or confidential relationship. This video does not include information about every topic or issue related to these informational materials.
#Form2555 #FEIE #ForeignEarnedIncomeExclusion

Пікірлер: 48

@ameliabudisavljevic9846 9 ай бұрын

I spent hours reading through publication 54, publication 519, instructions for 2555, and was more confused than when I started. You somehow made it clear and easy to understand in 16 minutes. Thank you!

@JZ-og3zk Жыл бұрын

This is the best video I can find for this confusing Form.

@TheVafa95 Жыл бұрын

Thanks for the clear explanation and additional reference to Schedule1 and 1040

@deathsapprentice 3 ай бұрын

Thank you so much for going over this step by step. It's made a huge difference. You explain things very clearly and the example you use was perfect!

@matchbox3eb Жыл бұрын

Great video! I have been abroad going on 2 years and I've been trying to get my 2021 earnings straightened out for a while now. I didn't have a knowledgeable tax guy and nobody has seemed to understand any of this that I speak with. Thanks for the clear info, I have a lot of work to do! lol

@JasonDKnott Жыл бұрын

Glad to hear it was helpful. Thanks for watching!

@tubericko 5 ай бұрын

It seems like you forgot to do Foreign Earned Income Tax Worksheet -- Line 16!

@jimfletcher8141 11 ай бұрын

Shouldn't there be taxes on the capital gains, interest and dividends? From what I've read, you pay taxes on the non excluded income using the total income ignoring the foreign exclusion. With total income over $100,000, he would not be in a tax free bracket.

@jjwilly13 Жыл бұрын

Thanks for the explanation, you made this so much easier

@JasonDKnott Жыл бұрын

Thank you for the positive feedback. Glad to hear it was helpful!

@jjwilly13 Жыл бұрын

@@JasonDKnott I have a question for my friend as well. She was out of the US for 325 days in 2022 but was out for the required 330 if the 12 month period were including Nov and Dec '21. Can she still get the FEIE if she's already filed 2021 taxes?

@andrea_decandia Жыл бұрын

My understanding is that the physical presence test is not binary, but based on a formula. In other words, if you are outside of the United States for 320 days, you still qualify for some amount of the exclusion

@donaldmaroney7207 Жыл бұрын

You are fantastic!

@JasonDKnott Жыл бұрын

Thank you for the support!

@khadijakhan6026 Жыл бұрын

that was really helpful! thanks

@JasonDKnott Жыл бұрын

Glad it was helpful!

@jorgeroperti9875 2 ай бұрын

My name is Jorge and I am one of your listeners, nice to meet you. I am a CPA in Argentina and I have just realized that none of my clients have paid the additional 1% tax required in Miami-Dade County. The tax is called the "Homeless Tax" and is paid by those who have alcohol licenses. I understand that the tax is retroactive. Can you help me? I need to find the best way to handle this with the ultimate goal of reducing the penalties for all my clients.

@virginiecavallaro1741 Жыл бұрын

that was very helpful! Thank you so much.

@markdobson2133 Жыл бұрын

Thankyou! Most appreciated.

@LisadB5 Жыл бұрын

Very helpful! Thanks so much

@genggui 2 жыл бұрын

I have to say I really like your video. I can learn from it every time. This style of video is very very clear and logical: a comprehensible introduction first, and then an example and finally going through completely. But there is a question I have a little confused: assuming John made 200,000 and paid 30,000 tax in other county, should we exclude 108,700 first and use 30,000 tax he paid in other county as tax credit?

@JasonDKnott 2 жыл бұрын

If you take the foreign earned income exclusion, you are still allowed to claim a foreign tax credit. However, the amount of the FTC is reduced. You must determine the amount of foreign tax allocable to the excluded income under the FEIE, and reduce your FTC by that amount. See Line 12 of the Form 1116 and the related Line 12 instructions within Form 1116.

@carrie4579 Ай бұрын

Great video! I would like to know wether taxpayer needs to choose one of two forms to file their foreign ordinary income ? form 2555 or form 1116? or they can file both at the same time?

@sazopro Жыл бұрын

God bless you!

@kyongaahn660 4 ай бұрын

Thank you. You are great to explain it so clearly step by step. I have one question. I had to go back to the USA because my son was sick and unemployed. While caring for him I needed to work to support him. I worked there for 3 months and I returned to my home overseas. Can I split up the foreign income exclusion since I was out to care for my sonand I did not intend to move back to the U.S.?

@ambeinik Жыл бұрын

Thank you for very useful video. I have searched high and low over the internet but cannot locate the “ Foreign Employer Conpensation” Form.

@tonythaiger93 2 жыл бұрын

Disagree on full days in the U.S. The date left/arrived is considered full day as well because it's not foreign days. Example. You leave the United States for France by air on June 10. You arrive in France at 9:00 a.m. on June 11. Your first full day of physical presence in France is June 12.

@sarahdias9056 2 жыл бұрын

Excellent video, thank you! Quick question, would the employer eventually know the employee is living abroad if he applied for FEIE? Assuming the employee doesn’t fill form 673.

@JasonDKnott 2 жыл бұрын

The FEIE is claimed on the taxpayers personal return, so the employer would not have access to that information. Most employee contracts will specify where the employee is permitted to work, because the physical location of the employee can have adverse tax consequences depending upon the jurisdiction.

@bacicb 8 ай бұрын

So what's the amount he saved on taxes on $95000? It would be nice if you included that number in the end.

@carrie4579 Ай бұрын

If a taxpayer lives and works abroad less than 330 days, such as 280 days, can he still choose to file 2555 form in order to exclude certain amount of his ordinary income?

@akro187 2 жыл бұрын

Great information. I have a question, I am AD Navy in Japan and my wife is Japanese. However we have an ITIN for her in order to get an American bank account/ tax filing. She works for a Japanese company paying Japanese taxes etc, nothing touched by the U.S. system. Is this the proper form to be filing out when we are filing jointly every year?

@reneborge6590 Жыл бұрын

Thank you Jason for sharing your knowlledge and going the informatio. I got lot of question, if you can help me or guide me through. I moved out US back on Feb 28 of 2016 and that year and year 2017 I work for a US company and move back to US end of 2017 and left again to foreign country on April 2018 and didn't work until the end t Of that year and work for a year and 8 months and all those years I didn't work full year and started working for US company December 2020 and still working for that compy and my question Can I still do taxes from 2 years back? What is the minimun amount of earning to do taxes? And I don't pay taxes here, I worm from home. Thank you for sharing. I US Citizen and I have my kids here too. Can I also include my kids?

@jacquesdesormiere4994 Жыл бұрын

First, thank you so much, excellent video! Quick one, I moved to Europe in Nov 2022, I am not planning on coming back to the US before the summer of 2024. I am suppose to submit my first 1040 in April for the 2023 tax year, can I submit a 2055 with it even though I have not spend a year abroad yet?

@DigitalNomadsExplore Жыл бұрын

Question: If an expat has been abroad for only Sept- December they can't use the physical test but the Bona Fide still be accepted?

@rakeshaggarwal1454 3 ай бұрын

Is it applicable to peraon who is moving to USA (On Visa, citizen of other country) in middle of year like May month, and worked all time including the initially 4 months of the tax year in his home country only. Even paid all taxes in home country before moving to USA. is he still eligible for 2555 ?

@BeastmovitateX 10 ай бұрын

What if people go on vacation to other countries like Europe, UAE etc for more than couple of months a year? Does a person still qualify for foreign earn income exclusion ?

@tammyo5749 2 жыл бұрын

If you filed 2555 for a US-Treaty country, such as Japan, are you going to file Form 8833 and Form 1116, just for the purpose of income tax withheld? Also, if you work in 2 different countries within the same year, your presence test would shift to one of these countries, or take a 1/1/-12/31 approach?

@markandchusadventures8506 Жыл бұрын

How do you get 5k on the Line 9 total when 95000 is negative and you are to add that negative number? I am trying to figure out my in come and don't know if I should put 0 or the negative amount for my total income after excluding my foreign income.

@10X_Brain_Time Жыл бұрын

Income Earned from US Employment with US Employer but Working Remotely from home Abroad 365 days a tax year so still qualify for FEIE ?..

@Hotpepper2005 2 жыл бұрын

What is the form number of the last page, “foreign employer compensation “ information? Where can I find?

@JasonDKnott 2 жыл бұрын

The FEC page is just a worksheet that was generated using our tax preparation software. It is not a preset form or schedule issued by the IRS

@Hotpepper2005 2 жыл бұрын

@@JasonDKnott thank you!

@dhanbarrion Жыл бұрын

good day to you sir, i have a question. if you apply for Foreign tax exclusion do you still have to do it yearly?

@jamesavakian4977 Жыл бұрын

I have websites that generate income and am considering moving to Mexico. Can I use the exemption if I am answering phone calls and emails from Mexico?