According to the Association of Americans Resident Overseas (AAR), 8.7 million American (excluding military persons) live in over 160 countries. AAR obtains this number through the US State Department. Even so, these numbers are a few years old and are only an estimate.
As a U.S. citizen, if you live and work abroad, the first $112,000 of foreign-sourced income you earn can be excluded from your taxable income for 2022. This amount is up from $108,700 in 2021. You would file a Form 2555 with your income tax return.
You can also potentially exclude up to an additional $15,680 by claiming a foreign housing exclusion for housing costs you incur while living abroad and pay for with your foreign-sourced income. This is contingent upon passing a bona fide residence test or physical presence test establishing your consistent residency abroad throughout the majority of the tax year.
Americans living outside the United States face particular tax requirements and compliance issues. To understand how this may affect your personal situation, consult with a CironeFriedberg tax advisor.
If you need assistance or have any questions on the information in this article, please call your CironeFriedberg professional. You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Stamford) or email us at info@cironefriedberg.com.
