Audit proof your deductions.
Clear tax tools for Americans abroad and 1099 earners. Check your foreign income exclusion, find the deductions you may be missing, and know what records to keep.
FEIE threshold calculator
Estimate how much foreign earned income you could exclude, based on the IRS limit for your tax year and your days abroad.
An estimate for planning, not tax advice. It doesn't include the foreign housing exclusion. You also need a foreign tax home, and self-employment tax still applies. Limits from the IRS: 2025 and 2026, 2027.
FEIE or Foreign Tax Credit?
Both can reduce US tax on foreign income, but they work differently. The better choice depends on your income, the tax you pay abroad, and your plans.
| Topic | FEIE Form 2555 | Foreign Tax Credit Form 1116 |
|---|---|---|
| How it works | Excludes qualifying foreign earned income from US taxable income, up to the annual limit. | Reduces US tax dollar for dollar for eligible foreign income taxes, within limits. |
| Income covered | Foreign earned income only. | Can apply to earned income and other foreign income, such as investment income. |
| To qualify | A foreign tax home, plus the bona fide residence or physical presence test. | You paid or accrued eligible foreign income tax. |
| Often considered when | You pay little or no foreign income tax and your income is near or under the limit. | You live in a higher-tax country or earn well above the limit. |
| Watch out for | Remaining income is taxed at higher brackets, and filing Form 2555 rules out the Additional Child Tax Credit. If you revoke the choice, you generally can't use it again for five years without IRS approval. | You can't take a credit for foreign tax on income you excluded. Unused credits can generally carry back one year and forward ten. |
Which should you look at first?
A starting point, not a recommendation. The right choice depends on your full return, so run both before you decide.
Find it, figure it, back it up
Quick tools for the questions that come up most at tax time. Each one uses published IRS figures for 2026.
General information, not tax advice. Only the business part of an expense counts, and each deduction has its own rules.
For business driving only, and commuting doesn't count. You can't also deduct actual car costs such as gas and repairs for the same vehicle in the same year. Rates from the IRS.
An estimate for planning, not tax advice. It leaves out the extra standard deduction for age 65 or older or for blindness. Figures from IRS Rev. Proc. 2025-32.
An estimate for planning, not tax advice. It leaves out state tax and the 3.8% net investment income tax. Rates from IRS Rev. Proc. 2025-32.
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Common questions
What is the Foreign Earned Income Exclusion?
It lets qualifying US citizens and resident aliens living abroad exclude foreign earned income from US taxable income, up to an annual limit. The IRS limit is $130,000 for 2025, $132,900 for 2026 and $137,300 for 2027.
Do I still need to file a US tax return if I live abroad?
Generally, yes, if your income meets the filing requirement. The FEIE is claimed on a filed return, using Form 2555, so living abroad doesn't remove the need to file.
What is the physical presence test?
You generally need to be physically present in a foreign country or countries for at least 330 full days during a 12-month period, and have a foreign tax home.
What is the bona fide residence test?
You generally need to be a bona fide resident of a foreign country for an uninterrupted period that includes a full tax year, and have a foreign tax home. It depends on your facts, such as your ties to the country and the purpose of your stay.
Does the FEIE cover self-employment tax?
No. The FEIE can reduce income tax, but self-employment tax can still apply. A totalization agreement may affect this in some countries.
Can I use both the FEIE and the Foreign Tax Credit?
You can use both in the same year, but not on the same income. You can't take a credit for foreign tax on income you excluded.
What makes a deduction hold up in an audit?
Records made at the time. Keep receipts, mileage logs and a note of the business purpose, so you can show what you spent, when, and why.
Is crypto taxable when I sell it?
Generally, yes. The IRS treats digital assets as property, so selling or trading them can create a capital gain or loss. The rate depends on how long you held the asset and on your income.
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