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- The bona fide residence test is used to gauge whether an American or US taxpayer is indeed a resident of a foreign country. The test is determined by IRS tax rules, and bona fide residency status does not apply to nonresident aliens or US citizens living in the United States.
www.greenbacktaxservices.com/knowledge-center/bona-fide-residence-test/The Bona Fide Residence Test: What It’s for and How To Qualify
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You meet the bona fide residence test if you are a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year. If you are a calendar year taxpayer, an entire tax year is from January 1st through December 31st.
In order to claim the foreign earned income exclusion, or FEIE, a US expat must have a tax home that is located outside of the US and either meet the bona fide residence or physical presence test. This article explains the bona fide residence test, how it works, and who can meet it.
Jul 15, 2024 · The bona fide residence test is used to gauge whether an American or US taxpayer is indeed a resident of a foreign country. The test is determined by IRS tax rules, and bona fide residency status does not apply to nonresident aliens or US citizens living in the United States.
To pass the bona fide residency test, the individual needs to reside within a foreign country for an entire tax year, defined as January 1 through December 31. The individual is allowed to leave this country for brief trips back to the U.S, or somewhere else for either vacation or business.
May 22, 2024 · The Bona Fide Residence Test helps expats and digital nomads reduce their U.S. tax obligations by proving long-term residence abroad. It allows for the Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC). Proper documentation, like lease agreements and utility bills, is essential.
Oct 22, 2023 · Understand the key differences between the Bona Fide Residence and Physical Presence Tests. This guide helps U.S. expats learn how these tests affect their taxes, with easy examples and clear advice for handling their foreign earned income.
Dec 28, 2023 · What is the Bona Fide Residence Test? According to the IRS, expats can use the Bona Fide Residence Test to be eligible for tax exclusions and benefits like: The Foreign Earned Income Exclusion. The Foreign Housing Exclusion and/or. The Foreign Housing Deduction.