Confused about qualifying for FEIE - bona fide residence vs physical presence test after moving abroad mid-year

You're right to be careful here. Let me clear up the confusion about these two tests. For the bona fide residence test, you need to establish that you're a resident of a foreign country for an uninterrupted period that includes an entire tax year (Jan 1-Dec 31). Since you moved in March 2022, you wouldn't qualify for bona fide residence for the 2022 tax year. However, you could qualify for 2023 if you remained a resident of the Netherlands throughout all of 2023. For the physical presence test, you need to be physically present in foreign countries for at least 330 full days during a 12-month period. This period doesn't have to align with the calendar year. So you could potentially use any 12-month period that started with your move (like March 3, 2022 to March 2, 2023). Brief trips back to the US would count against your 330 days, but vacations to other foreign countries still count as days outside the US. The physical presence test is likely your better option for the first partial year abroad.

After struggling with the same exact issue (moved to Germany in April 2022), I found a tool called taxr.ai (https://taxr.ai) that was super helpful for figuring this out. I uploaded my passport stamps and travel docs, and it showed me exactly which test I qualified for and calculated my qualifying days automatically. It also helped determine which portion of my income qualified for exclusion since I had partial year foreign income. Saved me from making a $4,200 mistake because I was calculating my exclusion amount wrong before using it!

I was totally skeptical about taxr.ai at first but decided to try it after my accountant quoted me $900 to sort through my travel history. Wow - it actually worked incredibly well. I uploaded my Google timeline data, Airbnb history, and a few pictures of passport stamps and it put together a complete timeline showing I qualified for the physical presence test even though I thought I might have been a few days short. The report it generated showed exactly which days counted and which didn't. My accountant was impressed enough that he actually asked me for the link to share with his other expat clients. Definitely worth checking out if you're dealing with this FEIE headache.

If you're having trouble getting answers from the IRS about your specific situation, I highly recommend Claimyr (https://claimyr.com). I spent weeks trying to get through to an IRS agent to ask specific questions about my FEIE situation, but kept getting disconnected or waiting for hours. With Claimyr, I got through to an actual IRS agent in about 20 minutes. Check out their demo at https://youtu.be/_kiP6q8DX5c to see how it works. The agent confirmed that for my situation (similar to yours), the physical presence test made more sense for my first partial year abroad. They also clarified exactly how to calculate my exclusion amount since I had mixed US and foreign income that year.

I was totally wrong about Claimyr being a scam. After waiting on hold with the IRS for 3+ hours across multiple days, I gave in and tried it. Within 45 minutes, I was talking to an actual human at the IRS who answered all my FEIE questions. The agent confirmed I should use the physical presence test for my first partial year abroad (moved to Thailand in May 2022) and helped me understand how to properly document my qualifying period. She even explained how I could structure my future travel to maintain eligibility while still visiting home occasionally. The service literally saved me days of frustration and probably prevented me from making an expensive mistake on my return. Definitely worth it.

Make sure you're keeping really good records of your travel! I got audited because I claimed FEIE and didn't have enough documentation to prove my physical presence days. The IRS wanted to see: - Passport stamps - Flight itineraries - Bank records showing transactions in your foreign country - Rental/utility payments - Employment records I ended up having to pay back taxes plus penalties because I was missing about 10 days of proof and fell below the 330 threshold.

One important thing nobody's mentioned yet - if you use the physical presence test, you need to file Form 2555 with your tax return. Make sure you fill out Part III (Physical Presence Test) completely, not Part II (Bona Fide Residence Test). Also, remember that the FEIE only applies to earned income (salary, wages, self-employment), not investment income. And the max exclusion for 2022 was $112,000, but it's prorated if your qualifying period doesn't cover the whole year.

For your 2022 situation, the physical presence test is definitely your best option since you moved abroad mid-year. You'll need to count 330 full days in any 12-month period - I'd suggest using March 3, 2022 to March 2, 2023 as your qualifying period. A few key things to watch out for: travel days to/from the US don't count as full days abroad (you need to be outside the US for the entire 24-hour period), but partial days at the beginning/end of your qualifying period can count if you were already abroad or stayed abroad. Since you mentioned taking vacations and visiting the US twice, make sure to carefully count those US days. Even if you went over the 35-day limit for US presence, you can still qualify as long as you have 330 full days outside the US within your chosen 12-month period. For 2022, your exclusion will be prorated based on how many days of your qualifying period fall within the tax year. So if your qualifying period is March 3, 2022 - March 2, 2023, you'd get about 304 days worth of the $112,000 exclusion for 2022 (roughly $93,400 max exclusion). Document everything well - keep all travel records, passport stamps, and proof of your Netherlands residence!