IRS form 2555 qualifies you for the IRS Foreign Earned Income Exclusion, and is a simple form to fill out with the rest of your taxes, takes 5-20 minutes depending on how many countries you lived in that year.
This is the official language of the IRS form 2555 physical presence test:
“You meet the physical presence test if you are physically present in a foreign country or countries 330 full days during any period of 12 consecutive months including some part of the year at issue. The 330 qualifying days do not have to be consecutive.”
Plainly, it doesn’t matter if you were absent from the United States between January 1st and December 31st to qualify, it only matters that you were not present in the United States for 330 of 365 consecutive days that include, in some part, the current tax year.
You could have been in the US until april, and then outside the US from May until the following april, and that’s fine to claim the FEIE and exclude a variable amount of your earned income tax as determined each year by the IRS (currently at $126,500 annually).
By tax year(Jan. 1 - Dec. 31) you were only out of the country for 270 days, but out of 365 calendar days, you were out of the country for 330+ days from May to April, and so you pass the physical presence test, which qualifies you for the Foreign Earned Income Exclusion.
It can be a US or non-US company that employs and pays you, you just have to be physically outside the US.
You file taxes normally every year at the regular time, absolutely use an online service and then e-file directly with the IRS. Cheapest, fastest, easiest way to do it. Taxact will work fine.
Snail mail, you would mail it back to your US state’s IRS office, but it’s not at all worth the trouble.
Feel free to ask me as many questions as cross your mind, I seriously have an absurd amount of free time and like helping people get independent.
Thank you! I assume something like taxact would prompt me with that form then. This is really good to know as I was worried about having to pay taxes I absolutely could not afford with my lower income in a different country
For sure!
It’s been hit or miss that I’ve been prompted for 2555, but i’ve used several online services and they definitely all have the form available with guidance to fill in. Long and short is, fill out basic info(name, address, annual earned income), check the “physical presence test” box, write out the dates and countries you lived in that year outside of the US. If those dates are over 330 days, you qualify. It’s a pretty short form and saves travelers a looot of money.
You mentioned sending it to the State office. As an expatriate I do not file state taxes as I earn no income in any state.
That question was regarding federal income taxes, not state income taxes.
You’re doing state taxes right.
You do not need to file state income taxes for a state you have not earned any income in.
Then why not send returns to the main IRS office in Austin? Why choose a state office?
Different US states and tax preparation services ask filers to send their federal tax returns to different IRS tax centers for processing around the country.
If you want to file a paper federal return as an expat, which I don’t recommend, you can mail it to the Austin office, or any IRS office, which may forward your federal return where it needs to go(IRS HQ is in DC), but if the US address you use on your federal taxes is in a state that designates a specific IRS office to mail your federal taxes to, I suggest following the IRS instructions.
To belabor the point, I strongly recommend e-filing instead of paper filing to avoid the above and many other complications and costs.
I don’t put a US address on my federal tax forms because I don’t have one.