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It is a bit more complex than you might think. One can qualify to take the FEIE if one is either a bona fide resident of a foreign country, something that may take over a year to even establish - or the physical presence test, having been outside of the US for at least 330 days out of 12 consecutive months. Either way, one could have been in the States for part of the year and prorates the annual exclusion accordingly. Just as an example, if the FEIE for the year were 120,000 USD (that was the level for 2023 but it usually goes up a bit every year) and one was 11 months out of the US and 1 month in, then the maximum exemption would be 110,000 USD. And as the name implies it is only for FOREIGN earned income; Not foreign unearned income on investments and nothing earned domestically in the US.

Rather than try to go into all of the details I will post this link to the IRS site. Read through carefully and if you have additional specific questions I will try to help if I can. I am neither a lawyer nor tax advisor but studied finance in the States and as a US expat have filed using the FEIE for 30 years.

@TominStuttgart

Thank you very much Tom for your info, I checked out the link you send but not sure how much of it I understood.

This is what I found correct me if I am wrong:

"tax home is in a foreign country"

And Definition of TAX HOME :

"

Yeah, the tax home means you are subject to taxation in the foreign country, if they have a income tax. Sometimes there are provisions that one works for a foreign branch of their home based company for a limited time and they will only be taxed at home and not in the foreign country. In such a case, one will not meet the tax home criteria to take the FEIE. People thinking they are clever to get around paying any tax are almost always missing something. The reason for the FEIE is indeed that one will not be double taxed, at least until a certain threshold.

@TominStuttgart

Thank you,

聽 聽 I guess I need to move to a country that does not have income tax, so I can stay for more than 90 days , and do not consider as a resident in that country.馃榾

Thank you again for your help

@TominStuttgart
Thank you,
聽 I guess I need to move to a country that does not have income tax, so I can stay for more than 90 days , and do not consider as a resident in that country.馃榾
Thank you again for your help - @Alex07

Good luck with that, not many country allow that and even then it doesn't mean you have any right to work. How about just paying your taxes?

@TominStuttgart

I will be working overseas but for a US company as a remote employee or 1099 contractor.

I am just trying to save on Federal taxes but still will be paying my social security and medicare portion, I will be filing, I am not trying to eliminate taxes , just to reduce them, and use my rights as much as I can.

@Alex07

@TominStuttgart gives some good pointers. I lived and worked in Austria for ten years. When I returned to the US I had to go to tax court because of some bad advice. Thankfully it turned out that I did not owe any taxes due to FEIE. I almost got double-taxed.

Pay for time with a tax lawyer that has experience in this area. Explain your situation and find out how tax laws will apply to you in the countries you might move to. It does vary from country to country. Do NOT do your own research. It could ruin you.

Wow , that is interesting, I glad it all worked out for you, I found several companies that are specializing in expat taxes , I am hoping they know what they are doing.

May I DM you for more questions please?

@TominStuttgart
I will be working overseas but for a US company as a remote employee or 1099 contractor.
I am just trying to save on Federal taxes but still will be paying my social security and medicare portion, I will be filing, I am not trying to eliminate taxes , just to reduce them, and use my rights as much as I can. - @Alex07

Sometimes there are country specific exceptions to the rule that one pays tax in the country where the service is provided. Usually on a limited contract for the overseas branch of a US company. One would think that the company sending people overseas should know the details of such a thing. If this is the case, then one would pay US taxes on all the income but not foreign taxes. I have no personal experience with this possible aspect and am not familar what being a 1099 contractor really means tax-wise.

@TominStuttgart

Appreciated Tom.

Wow , that is interesting, I glad it all worked out for you, I found several companies that are specializing in expat taxes , I am hoping they know what they are doing.
May I DM you for more questions please? - @Alex07

A couple of ideas:

1. Talk to the big accounting firms near you about your situation.
2. Talk to accounting firms that have digital nomad expertise.

@alan279

Sure, I will

Thank you