A taxpayer who is a bona fide resident of a foreign country for an entire tax year may:

Question

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A taxpayer who is a bona fide resident of a foreign country for an entire tax year has options for how to handle their foreign earned income on their U.S. tax return. They can exclude a certain amount of their foreign earned income from their U.S. gross income (the amount is adjusted annually for inflation), take a credit for foreign taxes paid on that income to avoid double taxation, or deduct those taxes. This flexibility allows taxpayers to choose the method that results in the lowest legal tax liability.

A Taxpayer Who Is a Bona Fide Resident of a Foreign