Foreign earned income exclusion

Right.

You usually avoid double taxation thanks to treaties and mechanisms like the Foreign Earned Income Exclusion.

For 2026, the FBI allows U.S. citizens to exclude up to one hundred and thirty two thousand nine hundred dollars of their foreign earned income from U.S. taxes.

But to claim that you have to pass the physical presence test, meaning you must be physically outside the United States for at least 330 days in a 12 month period.

So let's start with the U.S. rules.

The main provision we're dealing with is the Foreign Earned Income Exclusion, Section 911 of the Internal Revenue Code.

The F-E-I-E, that doesn't acronym real well.

But for

If you're a remote employee working for a U.S. company but physically sitting in Portugal, that income can qualify.

Investment income, on the other hand, and rental income are not covered.

That foreign earned income exclusion is specifically for, you guessed it,

earned income.

it's like five percent right and so if you get a florida address or you go to south dakota that's five percent in your pocket you're doing nothing

So that's the same income that I like apply on the FEIE, right? It's like my actual income, right? From working or whatever else, right? You do

your online consulting or whatever, but you do it from a South Dakota address, a Florida address, you

know.

No, but it's...

So technically, if you have a Belize company owning a Wyoming LLC and you own the...

Supposedly, it gets you out of paying the 15% payroll and Social Security on the portion you pay for FEIE, even though it's a little bit sketchy.

It's like the IRS has it.