FEIE Calculator: Estimate Your Foreign Earned Income Exclusion Savings
Use our free FEIE calculator to see how much the Foreign Earned Income Exclusion could save you. Step-by-step guide with examples for 2025 and 2026 tax years.
The Foreign Earned Income Exclusion (FEIE) is one of the most powerful tax benefits available to Americans abroad. But how much will it actually save you?
Use the FEIE calculator to find out in under 60 seconds.
What the FEIE Calculator Shows You
Enter your foreign earned income and filing status, and the calculator estimates:
- Your excludable income — up to $130,000 (2025) or $132,900 (2026)
- Your estimated tax savings — the federal income tax you avoid by claiming the exclusion
- Your remaining taxable income — any income above the exclusion limit
Quick Examples
Example 1: Salaried Employee Abroad
- Foreign earned income: $95,000
- Filing status: Single
- FEIE exclusion: $95,000 (full amount — below the limit)
- Estimated savings: ~$14,000 in federal income tax
Example 2: High Earner Abroad
- Foreign earned income: $180,000
- Filing status: Single
- FEIE exclusion: $130,000 (2025 limit)
- Remaining taxable income: $50,000
- Estimated savings: ~$24,000 (but you still owe tax on the $50,000 above the limit)
For income above the exclusion, the Foreign Tax Credit may help offset additional US tax — especially if you're paying taxes in a high-tax country.
Example 3: Married Couple Both Working Abroad
- Combined foreign earned income: $200,000 ($120,000 + $80,000)
- Each spouse claims the FEIE on their own income
- Total excluded: $200,000 (both are below the individual limit)
- Estimated savings: ~$30,000+
Both spouses must independently qualify for the FEIE by meeting either the Physical Presence Test or the Bona Fide Residence Test.
What the FEIE Does NOT Cover
The exclusion has limits. It does not apply to:
- Investment income — dividends, capital gains, interest, rental income
- Pension and retirement distributions — 401(k), IRA, Social Security
- Self-employment tax — Social Security and Medicare taxes still apply
- Income above the exclusion limit — taxed at your normal marginal rate
For investment income, consider the Foreign Tax Credit. For retirement income in Ecuador, see my guide to Ecuador's territorial tax system.
Do You Qualify?
You must meet one of two tests:
Physical Presence Test: You were physically present outside the US for at least 330 full days during any 12-month period. Days don't have to be consecutive. Partial days in the US count as US days.
Bona Fide Residence Test: You established genuine residence in a foreign country for an entire tax year. You'll need proof: a lease, local ID, utility bills, visa documentation.
Either test works — you don't need both. Read the complete FEIE guide for detailed eligibility rules.
FEIE vs. Foreign Tax Credit: Which Is Better?
It depends on your situation:
| Scenario | Best Choice |
|---|---|
| Low-tax or no-tax country | FEIE (no foreign taxes to credit) |
| High-tax country (UK, Germany, Japan) | FTC (credit may exceed FEIE savings) |
| Income under $130,000 | FEIE (full exclusion, simple) |
| Income well over $130,000 | FTC or both |
| Self-employed with high SE tax | FTC (doesn't help with SE tax, but neither does FEIE) |
Not sure? Use the FEIE calculator first, then try the Tax Savings Estimator to compare FEIE vs FTC side by side.
Ready to Claim the FEIE?
The FEIE requires Form 2555 filed with your tax return. It's one of the most commonly mishandled forms in expat tax filing — small errors can cost thousands.
If you'd like help claiming the exclusion correctly, reach out for a free consultation.
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About the Author
Chip Moreno helps Americans living abroad navigate U.S. tax obligations. Based in Ecuador, he understands the expat experience firsthand.
Ask Chip a Question