How much foreign income can I exclude?

The Foreign Earned Income Exclusion maximum is $130,000 for the 2025 tax year, indexed annually. That is a ceiling, not an entitlement: you can only exclude foreign earned income you actually have, and if you qualified for part of the year the cap is prorated for that part.

Is the FEIE limit prorated if I moved abroad mid-year?

Yes. The maximum exclusion is multiplied by the fraction of the tax year in which you met either the bona fide residence or the physical presence test. Someone who qualified for 200 days of a 365-day year has a cap of roughly 55% of the annual maximum. This is Form 2555 line 37, and it is the step most quick calculators leave out.

Does the FEIE eliminate self-employment tax?

No, and this is the most expensive misunderstanding for freelancers abroad. Section 911 excludes foreign earned income from income tax. Self-employment tax under Schedule SE is computed on your net earnings before the exclusion, so you can exclude all of your income and still owe roughly 15.3%. Relief usually comes from a totalization agreement with your country of residence, not from the FEIE.

What counts as foreign earned income?

Wages, salaries, professional fees and other pay for personal services performed in a foreign country. It does not include interest, dividends, capital gains, rental income, pension or annuity payments, US government pay, or distributions from a PFIC. Those remain in your US tax base regardless of the exclusion.

Should I claim the FEIE or the Foreign Tax Credit?

It depends, and the exclusion is not automatically better. The Foreign Tax Credit can preserve carryforwards, tends to work better in high-tax countries, and leaves income in the base for the refundable Child Tax Credit — which claiming the FEIE forfeits. Revoking the FEIE after claiming it also locks you out for five years without IRS consent.

FEIE Calculator — Foreign Earned Income Exclusion

Foreign Earned Income Exclusion calculator

Work out how much foreign earned income you can exclude on Form 2555 — including the prorated cap if you only qualified for part of the year, which is where most quick estimates go wrong.

Section 911 lets a qualifying US person exclude foreign earned income up to an annually-indexed ceiling — $130,000 for 2025. The calculation here is the one Form 2555 performs:

Take the statutory maximum for the tax year.
Multiply it by qualifying days ÷ days in the year. A full year of qualification leaves the cap untouched; a part year reduces it proportionally.
Exclude the lesser of that prorated cap and your actual foreign earned income.

Every figure comes from the site's audited facts registry, which records the source and verification date for each indexed amount. Years without a verified figure return no answer rather than an extrapolated one — an inflation-indexed number guessed forward looks authoritative and is wrong.

Limitations

The foreign housing exclusion and deduction are not modelled. They can add materially on top of this for people with high rent abroad.
This does not test whether you qualify — use the Physical Presence Test calculator or consider the bona fide residence test.
Your resulting US tax is computed in the return itself; excluded income is still used to set the rate that applies to your remaining income (the stacking rule).
Self-employment tax is unaffected by the exclusion and is not included here.

Sources

IRC §911 — citizens or residents living abroad.
IRS Form 2555 and its instructions, Parts VII–IX.
IRS annual inflation-adjustment revenue procedures for the indexed maximum.

Before you rely on this result

What would settle it, and what covers it

Documents or facts needed

• Foreign wages or self-employment income for the year
• Foreign housing costs, if claiming the housing exclusion
• Foreign tax paid
• Qualifying days or bona-fide residence dates

Where this leads

Simple · $299 — prepares Form 2555 or Form 1116 from the same figures.

Also possible: Complex ($799). The cheapest route that covers your facts is the right one; a package never covers more than one tax year.

How to read a status

Likely:: The facts entered meet the published test; confirm the inputs before acting.
Possible:: Some facts point this way and others are missing; more information decides it.
Needs review:: These inputs leave it open; a person should look before filing.
Not currently indicated:: Nothing entered triggers it this year; a changed fact can change the answer.
Outside supported scope:: This item is routed to a professional for preparation.

Scope. An exclusion estimate at the annual cap; the credit alternative and unearned income are modelled in the return. This is a computation on the answers you gave, not individualized tax advice.

What changes the result

This answer changes if…

Whether the exclusion or the credit is the better route

…your foreign income tax rate is above the U.S. rate on the same income — the foreign tax credit tends to leave no U.S. tax and carries excess credit forward; the exclusion cannot.
…you were in the United States for more than 35 days in the twelve-month period — the physical-presence test for the exclusion is lost for that period.
…the income is a pension, a distribution or investment income rather than earned income — the exclusion covers earned income only; the credit covers foreign tax on any category.
…you claimed the exclusion in a prior year and now revoke it — a revocation locks the exclusion out for five years without IRS consent.
…you have self-employment income — the exclusion does not reduce U.S. self-employment tax; a totalization certificate does.

Whether the 3.8% net investment income tax applies

…your modified adjusted gross income is below the threshold for your filing status — the tax applies only to the lesser of net investment income and the excess over the threshold. Check it
…you claim the foreign earned income exclusion — excluded wages are added back for the threshold test.
…you rely on a treaty to credit foreign tax against this tax — the credit against the net investment income tax rests on a treaty article and on litigated positions, not on Form 1116.
…a PFIC is under a QEF election — QEF inclusions enter net investment income only under a separate election (the 'section 1.1411-10(g)' election).

Each line names a fact that moves the result; what it moves to depends on the rest of your facts. Nothing here is a determination.

How Atamatax calculations are produced — the tests applied, statutory sources and review cadence — is documented in the methodology, and how the engine is validated in accuracy & review. Calculation fixes are recorded in the changelog.

Authorities cited

IRC §911 — IRC §911 — Foreign earned income exclusion + housing exclusion/deduction
IRS Form 2555 — About Form 2555 — Foreign Earned Income (FEIE + housing)

Primary sources (Cornell Legal Information Institute for the US Code and CFR; IRS.gov for forms, procedures, and treaty documents). This page is general information, not individualized tax or legal advice.