Can I switch from Physical Presence to Bona Fide Residence Test for Foreign Earned Income Exclusion?

Based on what you've shared, you appear to have a very strong case for the Bona Fide Residence Test. The key factors working in your favor are: 1. You've maintained continuous residence since 2012, with official residence status since 2016 2. You have permanent resident status via your retirement visa 3. You own (lease) property in your name 4. You haven't declared non-residence to local authorities 5. Your visa has no limitations on your stay The Bona Fide Residence Test is actually designed for situations exactly like yours - people who have established genuine, long-term residence in another country. The Physical Presence Test is more commonly used by those with temporary assignments or digital nomads who move frequently. The IRS recognizes that bona fide residents will occasionally need to return to the US for various reasons. As long as your trips are temporary and you maintain your foreign residence, you should be fine. Just make sure to document the temporary nature of your US visits.

Hey there, I went through exactly this transition about 3 years ago and found this amazing tool at https://taxr.ai that made the whole process so much easier. I was in the Middle East and had been using the physical presence test for years, but needed more flexibility to travel back to the States for family stuff. The tool analyzed my situation, showed me exactly what documentation I needed for the Bona Fide Residence Test, and even helped me understand how to properly document my trips back to the US so they wouldn't jeopardize my status. It was especially helpful in showing me how to address the questions about tax liability in my host country (I also didn't have to pay local taxes on foreign income). Even better, it gave me personalized confidence scores for both tests based on my specific situation, which really helped me make the decision to switch.

Just wanted to follow up on my previous comment. I actually tried out that taxr.ai tool mentioned above after doing some research. I was really skeptical at first since I'd heard switching from Physical Presence to Bona Fide Residence would trigger an audit, but the analysis they provided showed my situation was actually stronger under the Bona Fide test. The tool identified several factors I hadn't considered (like my local bank accounts, utility bills in my name, and my Thai driver's license) that strongly supported my bona fide resident status. It also helped me understand how to properly document my trips back to the US to show they were temporary visits rather than a return to US residence. I just filed my 2024 taxes using the Bona Fide Residence Test and had zero issues. Actually felt more confident than in previous years!

After struggling with FEIE questions for years, I finally got through to an actual IRS agent who specialized in international tax using https://claimyr.com. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was in basically the same situation as you - lived in Portugal for 6 years, but always used the physical presence test because I was worried about messing up the Bona Fide Residence requirements. After waiting on hold for hours on multiple days, I used Claimyr and got a callback from the IRS within an hour. The agent explained that Bona Fide Residence is actually PREFERRED by the IRS for long-term expats because it shows commitment to your foreign home. She reviewed my situation and confirmed I qualified easily, and that my occasional US visits (even up to 3 months) wouldn't jeopardize my status as long as I maintained my primary home abroad. It was such a relief to get this confirmation directly from the IRS instead of just reading conflicting advice online.

Following up on my skeptical comment - I actually tried Claimyr yesterday after getting nowhere for weeks trying to reach someone at the IRS about my FEIE questions. I was 100% convinced it wouldn't work or would be some kind of scam. I was shocked when my phone rang about an hour later and I was connected directly to an IRS agent! No hold music, no automated system - just straight to a real person who actually knew about international tax issues. The agent walked me through the Bona Fide Residence requirements and confirmed that, like the original poster, my situation (permanent residence visa in Malaysia, property ownership, local bank accounts) strongly qualified me for the test. She even explained exactly how to document my US visits to show they're temporary and not a return to US residence. This literally saved me dozens of hours of frustration and gave me confidence to file correctly. I can't believe I didn't know about this service sooner.

I've been using the Bona Fide Residence test for 7 years now (expat in Costa Rica) and it sounds like you definitely qualify. One thing to consider - if you travel to the US frequently, keep a travel journal documenting the purpose of each trip. My accountant advised this and it came in handy when I got a letter asking for more info (not a full audit) a few years back. Also, make sure you're documenting your community ties in your foreign country. Things like gym memberships, church attendance, community group participation, etc. These seemingly minor things actually help establish the "bona fide" nature of your residence.

Be careful with question 11 on Form 2555! It asks if you submitted a statement to foreign authorities saying you're NOT a resident. You answered no, which is correct, but make sure you understand why this matters. The IRS is checking if you're claiming non-resident status abroad while simultaneously claiming resident status for FEIE. My friend got flagged because he had a "non-resident" tax certification in Portugal while claiming bona fide residence to the IRS. Ended up losing his FEIE and owing back taxes plus penalties. Your permanent resident visa and property ownership are strong factors in your favor though!

Your situation sounds like a textbook case for Bona Fide Residence. I've been using it for 9 years in Chile despite traveling to the US for 2-3 months each year. One tip nobody mentioned: keep digital copies of EVERYTHING. When I got questioned (not audited, just a letter requesting more info), I uploaded digital copies of my: - Lease agreement - Permanent resident card - Utility bills (showing consistent usage) - Local bank statements - Community involvement (gym membership, church, etc) - Travel records showing pattern of returns to Chile Never heard from them again! The documentation speaks for itself. From everything you wrote, you're in better shape than I was. Go for it!

Based on your detailed description, you have an extremely strong case for the Bona Fide Residence Test. Your situation checks all the major boxes: continuous residence since 2012, permanent resident status since 2016, property ownership, and strong ties to your foreign country without maintaining a US home. The flexibility you're seeking is exactly what the Bona Fide Residence Test provides - it's designed for people like you who have genuinely established their life abroad but need occasional US travel flexibility. The Physical Presence Test is really better suited for shorter-term assignments or digital nomads. Don't worry about the audit concern. Switching tests is completely legitimate when your circumstances support it, and your documentation is solid. The IRS actually prefers the Bona Fide Residence Test for long-term expats because it demonstrates genuine commitment to foreign residence. One suggestion: start keeping a simple travel log documenting the purpose of your US visits (work, family, etc.) and evidence of your intent to return to your foreign home. This creates a clear paper trail showing the temporary nature of your US trips. Your permanent resident visa and property ownership are particularly strong evidence. You're making the right move!

Your situation is absolutely perfect for the Bona Fide Residence Test! I made this exact switch three years ago when I was living in the Philippines, and it was one of the best tax decisions I've made. The key factors that make your case so strong: - 13+ years of continuous residence (since 2012) - Official permanent resident status since 2016 - Property ownership (even leasehold counts) - No maintained US home - Clear intent to remain abroad long-term I was initially nervous about the switch too, but the IRS guidance is actually very clear that people can qualify under different tests at different times as their circumstances evolve. Your documentation looks solid. One practical tip: when you file Form 2555 using the Bona Fide Residence Test, make sure to attach a brief statement explaining your residence history and ties to your foreign country. I included a simple timeline showing my visa progression, property purchase, and community involvement. It helps paint the complete picture. The flexibility you'll gain is worth it - I can now visit the US for extended periods without constantly counting days or worrying about losing my exclusion. Your permanent resident visa gives you an even stronger position than most expats have. Go for it! Your case is as straightforward as they come for the Bona Fide Residence Test.