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Latest revision as of 14:03, 23 January 2025

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There is much confusion about what constitutes foreign earned income with respect to the residency location, the location where the work or service is performed, and the source of the salary or fee pay. Foreign residency or extended periods abroad of your tax payer is really a qualification to avoid double taxation.

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Basically, the irs recognizes that income earned abroad is taxed along with resident country, and might be excluded from taxable income coming from the IRS in case the proper forms are lodged. The source of the income salary paid for earned income has no bearing on whether is U.S. or foreign earned income, but instead where do the job or services are performed (as in the example associated with the employee discussing the You.S. subsidiary abroad, and receiving his pay check from parents U.S. company out with the U.S.).

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In 2003 the JGTRRA, or Jobs and Growth Tax Relief Reconciliation Act, was passed, expanding the 10% income tax bracket and accelerating some of your changes passed in the 2001 EGTRRA.

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