Form 2555

Form 2555

A form that one files with the IRS to claim a foreign earned income exclusion from U.S. taxation of income earned in a foreign country. One may file Form 2555 regardless of the amount one earns abroad, but the maximum exclusion is $92,900 (as of 2011).
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In general, a limit of $27,870 (up from $24,720 in 2006) was placed on eligible housing expenses; however, taxpayers could take a higher expense amount if they resided in specific countries or cities listed by the IRS in the instructions for Form 2555, Foreign Earned Income.
These returns had one or more of the following: a foreign tax credit, an attached Form 1116, foreign-earned income exclusion, housing exclusion or housing deduction, or an attached Form 2555 or Form 2555-EZ.
The Form 8938 instructions do not require that Form 2555 be filed with the income tax return.
Answer yes if the taxpayer (and spouse if filing a joint return) is not filing form 2555 or form 255-EZ to exclude from gross income earned in foreign countries or to deduct exclude foreign housing amount.
911 exclusion (which is what Form 2555 is all about) is an add-back to Column C of Schedule CA.
Federal Form 2555 computes the allowable exclusion of income earned abroad.
However, taxpayers could take a higher expense amount if they resided in specific countries or cities which were listed by the IRS in the instructions for Form 2555, Foreign Earned Income.
For 2001, taxpayers were not allowed to declare Iraq as a tax home for the purpose of filing a Form 2555, as it was listed as one of the countries falling under travel restrictions.
The average foreign-source salary for a taxpayer filing a Form 2555 was approximately $82,804.
For 2001, of the 130,255,237 individual income tax returns filed with the Internal Revenue Service, 294,763 had a Form 2555 attached, approximately 0.
The election must be made on Form 2555, Foreign Earned Income, or other comparable form.
The taxpayer may file an income tax return with Form 2555 either before or after the IRS determines the taxpayer failed to elect the exclusion if the taxpayer owes no Federal income tax (after taking into account the exclusion).