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For taxpayers with modified adjusted gross income (MAGI--AGI increased by the foreign earned income exclusion) over a threshold amount, the tax is imposed on the lesser of (1) net investment income or (2) MAGI over the threshold amount.
due to the application of the foreign earned income exclusion or foreign tax credits) will owe no failure to file or failure to pay penalties.
One of the most troublesome is the IRS-imposed cap on the Foreign Earned Income Exclusion (FEIE), which limits the amount of foreign income one can exclude from taxation (US$ 92,900 in 2011).
Modified AGI is AGI plus any tax-exempt interest, EE bond interest used for education and excluded foreign earned income.
The Obama plan, announced in May, would address foreign earned income on which companies don't pay U.
What Constitutes Foreign Earned Income A taxpayer's "foreign earned income" is her earned income attributable to services she performed during a qualifying period abroad.
Residence jurisdiction would generally be deemed to continue during a temporary absence abroad for less than three years; however, an unlimited exclusion for foreign earned income would be permitted in this case.
citizens or residents living abroad have been allowed to exclude certain foreign earned income and housing costs from taxable income, regardless of whether any foreign tax is paid on these amounts, under IRC section 911.