Introduction

This publication discusses in general terms some provisions of the U.S. federal income tax law that apply to U.S. citizens and resident aliens who live or work abroad and who expect to receive income from foreign sources.

As a U.S. citizen or resident alien, your worldwide income generally is subject to U.S. income tax regardless of where you are living. Also, you are subject to the same income tax return filing requirements that apply to U.S. citizens or residents living in the United States.

However, several income tax benefits might apply if you meet certain requirements while living abroad. You may be able to exclude from your income a limited amount of your foreign earned income. You also may be able either to exclude or to deduct from gross income your housing amount (defined later). To claim these benefits, you must file a tax return and attach Form 2555, Foreign Earned Income. If you are claiming the foreign earned income exclusion only, you may be able to use the shorter Form 2555-EZ, Foreign Earned Income Exclusion, rather than Form 2555.

You may, on your U.S. return, be able to claim a tax credit or an itemized deduction for the foreign income taxes that you pay. Also, under tax treaties or conventions that the United States has with many foreign countries, you may be able to reduce your foreign tax liability.

Publications 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, 514, Foreign Tax Credit for Individuals, and 901, U.S. Tax Treaties, discuss in detail the treatment of your foreign income, the foreign tax credit, and the general tax treaty benefits available to you.

Students or professors who receive income from teaching or while studying abroad should also get Publication 520, Scholarships and Fellowships.

See How To Get More Information near the end of this publication for information about getting publications and forms.

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