Bon Voyage, Taxes! How the Foreign Earned Income Exclusion Helps You Keep Your Hard-Earned Cash!

Are you a globetrotter? Do you love exploring new countries and cultures? Well, if you're a US citizen or green card holder, you might be eligible for the Foreign Earned Income Exclusion (FEIE) - and that's something worth celebrating!

Now, before you pop that champagne, let's break down what the FEIE actually is. Essentially, it's a tax exemption that allows you to exclude a certain amount of your foreign-earned income from US taxes. As of 2021, the maximum exclusion amount is $108,700, which is nothing to sneeze at! That's $108,700 of tax free income!

So, who's eligible for this sweet deal? In order to qualify for the FEIE, you need to meet either the Physical Presence Test or the Bona Fide Residence Test. The Physical Presence Test requires that you spend at least 330 full days outside the US in a 365-day period, while the Bona Fide Residence Test requires that you establish a "tax home" in a foreign country and intend to live there indefinitely.

Now, I know what you're thinking - "What about all the paperwork and tax forms I'll have to deal with?" Fear not, my friend - while filing taxes as an expat can be a bit more complicated than the average US taxpayer, there are plenty of resources out there to help you navigate the process. And trust me, the savings you'll see from the FEIE make it well worth the effort. Of course, it's always a good idea to consult with a tax professional specializing in expat taxes to ensure you're taking full advantage of all the tax benefits available to you. But with a little research and careful planning, you could be well on your way to living your best life abroad while saving some serious cash in the process

So go ahead, book that one-way ticket to Bali, Buenos Aires, or Berlin - and don't forget to raise a glass to the FEIE while you're at it. Cheers to exploring the world and keeping more of your hard-earned money in your pocket!

Questions about the FEIE and how you could benefit as a digital nomad? Throw them in the comments below and we'll do our best to answer them. Happy travels, friends!