Discover all the tax services we offer
Get an instance service estimate
Comprehensive guides on everything you need to know from planning your expat journey to filing your expat taxes with ease.
Our Country Guides will help you understand the ins and out of your specific U.S. expat tax requirements.
Access up-to-date articles, breaking news, deadline information and in-depth case studies on US expat taxes.
Get the answers to all your questions and browse Greenback’s most frequently asked customer questions.
Sign up for one of our live webinars hosted by our expert accountant team or watch one on-demand today.
Subscribe to our monthly newsletter to get money-saving tips, expat tax news, and exclusive promos.
Learn how our straightforward pricing, easy process, and an expert team makes us uniquely qualified to simplify the hassle of expat tax filing.
We’ve assembled a team only the most experienced, knowledgeable, and friendly CPAs and IRS Enrolled Agents our clients can trust.
Read our client testimonials to get a feel for the Greenback experience straight from the expats we’ve worked with.
We’re featured in many reliable news sources thanks to our reputation as experts on US taxes abroad.
Whatever your expat tax needs, wheverver in the world, we’d love to hear from you.
Expat Tax Essentials
US citizens who live and work outside the United States may be able to exclude all or part of their foreign-earned wages and self-employment income from the federal income tax through a provision called the Foreign Earned Income Exclusion (FEIE).
However, to qualify for the FEIE, a person needs to either work or reside outside the United States and complete the Bona Fide Residence or Physical Presence Test to prove eligibility.
The bona fide residence test can be used if you are a bona fide resident of a foreign country or countries for an uninterrupted period in the entire tax year. You can use the bona fide residence test to qualify for the FEIE and foreign housing deductions only if you are a US citizen or a US resident alien.
To qualify as a bona fide resident of a foreign country, you must have established a residence there. Your residence is not always the same as your domicile. Your domicile is your permanent home – a place you always return to or intend to return to.
You can look at a bona fide residence test based on the intention or purpose of your trip and the nature and length of your stay outside the United States.
Under the bona fide residence test, taxpayers can leave the country for brief trips back to the US or elsewhere for vacation. However, you must have a clear intention of returning from such trips to your foreign residence.
If you are physically present in a foreign country or countries for 330 full days (a full day is 24 consecutive hours) during 12 consecutive months, you would then meet the physical presence test. The 330 days do not have to be consecutive; this also applies to US citizens and US permanent residents.
One of the differences between the physical presence test vs. the bona fide residence test is that the physical presence test is based on how long a person stays in a foreign country and is not dependent on the kind of residence established, the intentions of returning to the US, or the nature of the stay abroad.
Additionally, the 330 days for the physical presence test are counted for any reason for staying abroad, not necessarily if it is for employment reasons. You can even be on vacation. However, you do not meet the test if illness, family problems, a vacation, or your employer’s orders cause you to be present for less than the required amount of time.
Both tests have a time requirement for you to qualify, whether you’re looking at the bona fide resident or physical presence tests.
However, the minimum requirement can be waived if you must leave a foreign country because of war, civil unrest, or adverse conditions, as long as you can show that you are not meeting the test due to those conditions. You must have your tax home in the foreign country and be a bona fide resident of, or physically present in, the foreign country on or before the beginning date of the waiver.
Additionally, if you are in a foreign country in violation of US law, you will not be treated as a bona fide resident or as physically present in a foreign country while you are in violation of the law. Income in those countries would not qualify as foreign-earned income, and your housing expenses abroad could not be included in your foreign housing amount.
Greenback accountants know the specifics and can help you choose the right test for your situation, including the bona fide residence vs. physical presence tests. If you’re ready to be matched with a Greenback accountant, click the get started button below. For general questions on expat taxes or working with Greenback, contact our Customer Champions.
Filing expat taxes doesn’t have to be a hassle. Start your filing process with Greenback today.