Living and working abroad
(Earned Income Exclusion)

Ogle international tax advisors understand the difficulties encountered by many Americans and permanent residents who work abroad dealing with the additional expenses and difficulties of living abroad. Day to day issues are further complicated at year end when income tax returns are due.

Generally speaking, U.S. citizens must pay income tax to the country in which they work while remaining subject to U.S. taxation. The fact that the U.S. is the only developed country in the world that imposes taxes based upon citizenship and not on residence can result in double taxation. This double taxation can be particularly detrimental to U.S. citizens working in foreign countries with high income tax rates.

Internal Revenue Code Sec. 911, however, provides some relief by allowing US taxpayers who meet certain requirements to elect to exclude from US taxation a limited amount of foreign earned income plus housing costs and to claim in certain instances a credit for foreign income taxes.

Ogle international tax advisors assist clients navigate through the complexities of the 911 exclusion as well the foreign tax credit calculation. Our professionals advise clients on how to meet and document IRC section 911 requirements and how to review employment agreements for base compensation, bonuses, and reimbursement of housing and moving costs. We also provide tax advice as to whether to elect the exclusion or use the foreign tax credit and subsequently, whether to leave the exclusion election in effect or to revoke it.

For more information, please call us or download our Foreign Earned Income brochure including a summary of the tax rules relating to IRC Sec. 911 election.