The foreign earned income exclusion is a provision aimed at preventing double taxation by permitting individuals to exclude income earned in another country from U.S. taxation. Under the U.S. Internal Revenue System (IRS), global income of American citizens is generally subject to taxation. However, for U.S. expatriates and certain qualifying individuals living and working abroad, this exclusion allows them to avoid being taxed twice on the same income. Essentially, it means that income earned overseas, which has already been taxed by a foreign country, may be exempted from further taxation by the IRS. This provision helps mitigate the potential burden of double taxation for Americans living and working abroad.
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