A few couple of weeks ago you were talking with a young 24-year-old about to leave the military but was considering going back to Afghanistan as a civilian contractor air traffic controller. The question about taxable or non-taxable income came up, and you mentioned that the guy should check with his tax advisor about taxes on foreign earned income.
Dave, when a US citizen earns money in a foreign country, they can exclude the first $104,100 (for 2018) from their US taxes. When we lived overseas (which we did for 20 years as missionaries), we never had to pay taxes on those earnings. The exclusion is inflation adjusted, so it goes up over time. Continue reading “Dear Dave: About That Foreign Earned Income”