SOFA Tax Exclusions

Do Military Contractors Pay Taxes in Countries with SOFA Agreements?

A status of forces agreement, often called a SOFA, is an agreement between a nation that is hosting stationed military forces in their country, and the nation of those forces. Sometimes these agreements are part of a larger swath of military agreements that comprise a more wide-ranging security arrangement. These agreements usually apply to American […]

Expats Working in Afghanistan

Expats Working in Afghanistan: Are They Tax Exempt?

While working in Afghanistan, some of your income may be tax exempt thanks to exclusions that lower your US tax bill. The IRS-defined differences between a military contractor and a government worker determine what exemptions the two categories of workers can get. So, let’s talk about the expats working in Afghanistan, and what type of […]

Military Contractors and the Foreign Earned Income Exclusion

Tax Savings in Afghanistan: The Foreign Earned Income Exclusion (FEIE)

Good tax news is hard to find, but recently, the Bipartisan Budget Act changed the tax home stipulation for contractors as well as employees of contractors, so long as they worked in the US armed forces. To be eligible, they also must work in IRS-determined combat zones. Now, military contractors can claim the Foreign Earned Income […]

Foreign Earned Income Exclusion and Combat Zone Exclusion

Combat Zone Workers Can Use the Foreign Earned Income Exclusion

If you work in a combat zone, you can exclude a hefty portion of your salary or compensation either through the Combat Zone Exclusion or through the Foreign Earned Income Exclusion.   What Is the Combat Zone Exclusion?  The combat zone exclusion applies to wages and compensation paid by the US government to military and civilian employees. To qualify, employees must be […]

US Expat Taxes for Military Contractors

US Expat Taxes Explained: Implications for Military Contractors

If you are a military contractor, you are likely interested in finding out if your expat taxes are categorized as civilian or military. Generally speaking, military contractors working abroad must follow the same rules as civilian US citizens who work abroad. They must report all of their worldwide income on their US expat taxes, they […]