Physical Presence Test Lawyers

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What Is the Physical Presence Test?

U.S. citizens or resident aliens with a tax home in a foreign country may be eligible for foreign income tax exclusions of up to $80,000 designed to prevent them from having to pay income tax to the United States in addition to the country where they currently live. One way to qualify for this type of tax exclusion is to meet the qualifications for the physical presence test.

How Can I Satisfy the Physical Presence Test?

You can qualify under the physical presence test if you are physically present in a foreign country or countries 330 full days during a period of 12 consecutive months. Here is a detailed explanation of the requirements:

Can I Move Between Foreign Countries?

Yes. However, if any part of travel is not in a foreign country and takes more than 24 hours, then you will lose full days.

How Is This Test Different from the Bona Fide Residence Test?

The physical presence test is based only on how long you stay in a foreign country or countries. Unlike the bona fide residence test, this test does not depend on the kind of residence you establish, your intentions about returning, or the nature and purpose of your stay abroad.

What If I Am Unable to be Physically Present?

You do not meet the physical presence test if illness, family problems, a vacation, or your employer's orders cause you to be present for less than the required amount of time. However, you may still qualify if you fall under one of the IRS's exceptions.

What If I Am Confused about the Test?

If you have questions about the physical presence test and how it may apply to you, it may be necessary to contact a tax attorney. Consulting with an attorney when questions and issues arise could save you a lot of money in taxes.

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Last Modified: 11-04-2014 03:42 PM PST

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