U.S. Citizens Working Abroad

In 2018 taxpayers can exclude up to $104,100 in wages or earned income. To qualify you have to satisfy either the bona fide residence test or the physical presence test. To be a bona fide resident you have to be a resident for a full tax year in the foreign country. The physical presence test requires being present in a foreign country or countries 330 full days during a period of 12 consecutive months. Spending more than a month in the U.S. will cause you to fail the physical presence test.  If you only qualify for part of the tax year you get a pro-rated amount of the exclusion. You have to track the days you come back to the U.S. and whether it was work or vacation.