Foreign Income Tax Exclusion for a contractor in Iraq for only 6 months?

Question

I have been in Iraq only for 6 months of the 2006 tax year. How much of the Foreign Income Tax Exclusion do I qualify for that year. I do not meet the physical presence test or the bona fide resident test.

So how do I maximize this tax deduction this year?

I will be here longer than 330 days. Actually I will be here a total of 1 year and half alltogether.

Answer 1

Better ask the IRS. I thought you had to be there over 300 days to get an exclusion.

Answer 2

You do not qualify for the FETI for 2006. You do not meet the bone-fide residence test or the physical presence test.

To mee the residence test, you must be a bona-fide resident of the foreign country for the entire tax year. To meet the physical presence test you must be physically present in one or more foreign countries for 330 full days in any full 12 month period.

Once you have met either test you may be eligible for the exclusion. It's not possible to say when or even if you will be eligible for the exclusion in 2007 from the information provided.

See IRS Pub 54 for more information.

Answer 3

once you fill out the 2555EZ style there are situations you ought to fulfill to qualify,, 7 of them i imagine that is,, in case you meet all 7 situations and use that sort, then that is a similar as in case you used the longer 2555 style and also you may enter the excluded income in column C