Living Abroad: Foreign Earned Income Tax Exclusion & Form 2350 Filing Questions

Thanks for this explanation! Quick question - if I'm in a similar situation but started working abroad in November 2021, would I still qualify for Form 2350 even though I'll need until November 2022 to meet the physical presence test? That seems like a really long extension.

Yes, that's exactly what Form 2350 is designed for! The IRS understands that meeting either the physical presence test (330 days in a foreign country during a 12-month period) or the bona fide residence test (full tax year as a resident) takes time, which is why this special extension exists. The extension typically gives you until 30 days after you qualify for the exclusion, which in your case would be around December 2022. This is completely normal and acceptable for those who started working abroad late in the tax year. Just make sure you provide a reasonable explanation on the form about when you expect to qualify for the exclusion.

Did it help you figure out estimated tax payments too? I'm in Qatar and my company doesn't withhold US taxes, so I'm worried about getting hit with underpayment penalties if I wait for the FEIE to kick in.

Was the analysis accurate? I tried another tax tool specifically for expats last year and it completely missed some foreign tax credits I was eligible for, which cost me money.

Yes, it definitely helped with estimated tax payments. It calculated what I would likely owe after the FEIE and suggested an appropriate estimated payment to avoid penalties while not overpaying. It even generated the estimated payment vouchers for me. The analysis was surprisingly accurate. Unlike general tax software, it seems built specifically for expat tax situations. It correctly identified both the foreign earned income exclusion and foreign tax credits opportunities. It even flagged that I might need to file an FBAR form for my foreign bank accounts, which I hadn't even considered.

How does this even work? The IRS phone system is literally designed to be impenetrable, especially for international issues.

Yeah right. No way this actually works. I've been trying to reach the IRS for months and they just disconnect me after 2 hours of waiting. This sounds like a scam.

It uses a technology that navigates the IRS phone system's call queue for you. Instead of you waiting on hold, their system does the waiting and then calls you once it reaches an actual agent. It's basically like having someone stand in line for you. I was extremely skeptical too, which is why I mentioned it. I'm not affiliated with them in any way, just someone who wasted weeks trying to get through on my own. After trying multiple times at different hours (even setting alarms for 3am to try to reach someone), this was the only thing that worked. The IRS agent I spoke with answered my specific questions about Form 2350 and foreign income reporting requirements, which saved me from making a costly mistake on my taxes.

Thanks for this detailed list! Do you know if digital records are sufficient? Like PDFs of boarding passes and bills? Or should I be keeping hard copies of everything?

Digital records are absolutely sufficient! I keep everything in organized folders by year and category (travel, housing, employment, etc.). PDFs are perfect since you can easily email them if needed. The important thing is being able to create a clear timeline of your physical presence if questioned. I also recommend keeping a simple log of days in/out of your foreign country - there are even apps designed for expats that can help with this. The IRS doesn't specify a required format, they just want to see that you can substantiate your claim of meeting the 330-day physical presence test or the bona fide residence test.

Do you know if foreign retirement accounts also trigger FBAR filing? My employer in Singapore contributes to a mandatory retirement system, and I'm not sure if that counts.

Yes, foreign retirement accounts typically do trigger FBAR requirements if they exceed the $10,000 threshold. Singapore's CPF (Central Provident Fund) would generally need to be reported since you have a beneficial interest in the account, even though it's employer-contributed and has withdrawal restrictions. However, there are some nuances - if the account is truly government-managed (like CPF) rather than a private account, there might be exceptions. I'd strongly recommend checking with a tax professional who specializes in expat taxes or using one of the tools mentioned earlier to get specific guidance for Singapore's retirement system. The penalties for not filing FBAR when required are severe, so it's better to be overly cautious.