I think you've rather missed the point. If all you have is earned income (i.e. salary) the first $97k is tax free under the FEIE. It gets more complicated if you have unearned (i.e. investment) income.:-(
Phooey! I was hoping it would still remain tax free.
Absolutely....we're talking about working in one of those Middle Eastern countries that has no income tax at all. To use the FTC, you have to be paying an income tax to your country of residence. FEIE is the way to go under these circumstances.
Well, they are tax free to U.S. citizens up to the FEIE plus Foreign Housing Exclusion limits, which is still not bad -- and a lot better than, say, working in Texas at equal purchasing power gross earned incomes. But yes, that's an important point for those with moderately high (and above) salaries working in these jurisdictions....some jobs in tax-free countries are advertised in the international press as being "tax-free." This is fine, except for the Americans interested in the positions, who always have to consider the US tax side of these "tax-free" posts.
Well, yes and no. If your net actual tax liability is zero or less than zero (i.e. you're owed a refund from the IRS), then there is no penalty for non-filing. Yes, you're supposed to file if you're past the filing thresholds, but it's a penalty-free sin.RandallSamaritan said:...as long as you meet the filing requirements to file a tax return (which is based on income before any deductions or exclusions), you must file a tax return.