What is the FEIE?
The Foreign Earned Income Exclusion (IRC §911) lets US citizens and resident aliens living abroad exclude a portion of their foreign earned income from US federal income tax. For 2025, that limit is $130,000 per qualifying person; for 2024 it was $126,500. The 2026 figure is estimated based on inflation adjustments — IRS publishes the official number each fall.
Who qualifies?
You must meet either the Bona Fide Residence Test (resident of a foreign country for an uninterrupted tax year) or the Physical Presence Test (330 full days in any 12-month period). Your "tax home" must also be in a foreign country.
What this estimator does NOT model
- Foreign Housing Exclusion / Deduction (significant in high-cost cities — Geneva, Hong Kong, etc.)
- Foreign Tax Credit (FTC) — often better than FEIE for high-tax countries
- Self-employment tax — SE tax is NOT reduced by FEIE, only income tax is
- State income tax — depends on your state of last residence
- Net Investment Income Tax (NIIT) on passive income
- FBAR / FATCA reporting requirements
This is an estimator, not tax preparation. For a real return, use a CPA familiar with expat taxation.