Roth 401(k) and Foreign Earned Income exclusion?

Question

Im a US citizen starting work with a US company that offers a 401(k) plan with a "Roth" option. Since I live overseas, I'll be able to use the foreign earned income exclusion to exclude all of my income from this job. Does anyone know if I can make the Roth 401(k) election under these circumstances? If I do, do the Roth 401(k) contributions somehow become taxable?

Thanks in advance for your help.

Answer 1

If you take the exclusion you cannot contribute to a 401(k) or IRA.

You don't have to exclude your income, however. In many cases it's more worthwhile to take the credit for foreign income taxes paid. If you go that route you can contribute to either a 401(k) or IRA.