This is an awesome little tool to use to see if you qualify for the foreign earned income exclusion. This is always an issue every year for contractors, and especially when you have worked multiple contracts and you are not quite sure if you qualify.
Personally, I think the FEIE should be based on a pro-rated system*. Meaning for how many days you worked in country, is how many days you earned. Guys who worked 330 days, earn the full exclusion–as they should. Guys who could only get in half that many days overseas, should be able to get half the exclusion amount. The way it is set up now, you could spend 229 days overseas, and because you couldn’t get that one day, you do not qualify.
That is a crappy set up in my view, and for many folks to get that 330 days overseas can be pretty difficult. Especially if you have family obligations, you change contract or the company only gives a limited amount of days overseas, or some unexpected issue came up that would hinder your plans for staying overseas. Then your penalized for it, as if all those days worked didn’t mean anything.
Either way, check it out and let me know what you think? –Matt
*it is only pro-rated if you start in one tax year, and promise to continue working overseas into the next tax year.
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Foreign Earned income exclusion eligibility online tool
While our online tool is designed based on years of experience and IRS source documentation, please remember that the most valuable advice we can give you for your foreign tax planning needs would be the result of proper analysis and live conversations. This online assessment can indeed give you a very good idea of your eligibility for the foreign earned income exclusion. Please click on the button below to begin the assessment (You are 5 minutes away from finding out if you qualify!):