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Foreign Earned Income Exclusion (FEIE) Calculator

Estimate your 2026 foreign earned income exclusion using the $132,900 per-person limit, the foreign housing exclusion, and the stack-and-clawback tax calculation. Built for U.S. expats and self-employed abroad who file Form 2555.

Foreign Income

Foreign Earned Income (annual)

Wages, self-employment income, or professional fees earned while meeting the bona fide residence or physical presence test (330 days).

Foreign Housing Expenses (annual)

Other U.S. Income (annual)

Housing expenses include rent, utilities (except telephone), insurance, and furniture rental. The 2026 base is $21,192 and the general cap is $39,870.

Filing Status

If both spouses qualify and both have foreign earned income, each can claim the full $132,900 exclusion.

FEIE Results (2026)

Enter your foreign income and click calculate.

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Introduction

The Foreign Earned Income Exclusion is the largest single tax break available to U.S. citizens and resident aliens living abroad, and the 2026 limit is $132,900 per qualifying person under Rev. Proc. 2025-32. A married couple where both spouses have foreign earned income and both qualify can exclude up to $265,800 combined. The catch is the stack-and-clawback rule: excluded income is still taxed indirectly because your non-excluded income is taxed at the brackets that would have applied had you not claimed the exclusion, so the benefit is not a flat $132,900 off your tax bill. The IRS Form 2555 instructions and Publication 54 lay out the mechanics. This calculator applies the 2026 limit, the foreign housing exclusion, and the stacking calculation so you can see the real savings before you file.

What This Calculator Does

This tool estimates the 2026 Foreign Earned Income Exclusion benefit for a U.S. expat. Enter your foreign earned income, foreign housing expenses, any other U.S. income, and your filing status. It applies the $132,900 per-person exclusion, the foreign housing exclusion (housing expenses minus the $21,192 base amount, capped at $39,870), and the stack-and-clawback tax calculation. It reports the excluded amounts, the tax with and without the FEIE, and the estimated tax saved.

The Formula

FEIE Excluded = min(Foreign Earned Income, $132,900). Housing Excluded = min(max(Housing Expenses - $21,192, 0), $39,870, Foreign Earned Income - FEIE Excluded). Tax with FEIE = Tax(FEIE Excluded + Taxable Non-Excluded Income) - Tax(FEIE Excluded).

The FEIE excludes up to $132,900 of foreign earned income from U.S. income tax in 2026, per qualifying person. The foreign housing exclusion is separate: it equals your foreign housing expenses minus a base amount (16% of the FEIE limit, or $21,192 in 2026), capped at 30% of the FEIE limit ($39,870), and it cannot exceed your foreign earned income above the FEIE exclusion. The stack-and-clawback rule means you compute tax on your non-excluded income at the marginal rates that would have applied to your total income, so the excluded dollars still push your remaining income into higher brackets. The calculator approximates this as the tax on (excluded plus taxable non-excluded) minus the tax on (excluded only), which is the standard worksheet method.

Step-by-Step Example

Enter your foreign earned income

An expat teacher in Germany earning $145,000 enters 145000.

Enter housing expenses

She pays $28,000 in rent and allowable utilities and enters 28000.

Set filing status

She files as single.

Read the savings

FEIE excludes $132,900, housing excludes $6,808, and the stacking rule leaves a small tax on the remaining income. Estimated savings run into five figures versus no exclusion.

Real-World Use Cases

Expat Assignment Cost Planning

An employer structuring an overseas assignment estimates the expat U.S. tax liability to size a tax-equalization package, since the FEIE and housing exclusion materially change the net cost.

Self-Employed Abroad Tax Planning

A freelance consultant living abroad uses the calculator to estimate the FEIE benefit, while remembering that the exclusion does not reduce self-employment tax, which still applies to the full net earnings.

Foreign Tax Credit vs. FEIE Decision

An expat in a high-tax country compares the FEIE savings against the Foreign Tax Credit to decide which gives the better outcome, since you cannot double-count the same income for both.

Common Mistakes to Avoid

Forgetting the stacking rule. The FEIE does not simply subtract $132,900 from your income. Your remaining U.S. income is taxed at the brackets that would have applied to your full income, so a U.S. source dividend or rental income can be taxed at a higher rate than expected.
Assuming the FEIE reduces self-employment tax. It does not. The FEIE reduces income tax but not self-employment tax. A self-employed expat still owes the full 15.3% SE tax (up to the $184,500 Social Security wage base) on net foreign self-employment earnings, even on the excluded portion.
Missing the physical presence day count. The physical presence test requires 330 full days abroad in any 12-month period. A trip home that breaks a full day can disqualify you. Track your days carefully, especially in the first and last partial years.
Ignoring the housing exclusion cap by location. The $39,870 general cap is higher in designated high-cost localities (London, Tokyo, Hong Kong, Singapore, and others). If you live in a high-cost city, check the IRS housing limitation table for the higher local cap.

Frequently Asked Questions

What is the 2026 foreign earned income exclusion amount?

The 2026 FEIE limit is $132,900 per qualifying person, up from $130,000 in 2025, under Rev. Proc. 2025-32. A married couple where both spouses have foreign earned income and both qualify can exclude up to $265,800 combined. The foreign housing base amount is $21,192 and the general maximum housing exclusion is $39,870 for 2026.

Do I have to choose between the FEIE and the Foreign Tax Credit?

You can claim both, but not on the same income. You can exclude income under the FEIE and claim the Foreign Tax Credit on income above the exclusion limit, or you can forgo the FEIE and claim the Foreign Tax Credit on all foreign income. In high-tax countries, the Foreign Tax Credit often produces a better outcome because it offsets U.S. tax dollar-for-dollar rather than excluding a fixed amount.

Does the FEIE cover self-employment income?

Yes, the FEIE can exclude foreign self-employment income from income tax, but it does not reduce self-employment tax. A self-employed expat still owes the full 15.3% SE tax (up to the 2026 Social Security wage base of $184,500) on net foreign self-employment earnings. Some countries have a totalization agreement with the U.S. that can shift the social tax liability.

What are the two qualification tests for the FEIE?

You qualify under either the bona fide residence test (you are a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year) or the physical presence test (you are present in a foreign country or countries for at least 330 full days during any 12 consecutive months). U.S. government employees abroad do not qualify. Military members generally do not qualify because their pay is not foreign earned income.

Accuracy and Disclaimer

This calculator applies the 2026 FEIE limit of $132,900, the $21,192 housing base, and the $39,870 general housing cap under Rev. Proc. 2025-32. It uses an approximation of the stack-and-clawback tax calculation. It does not model totalization agreements, the Foreign Tax Credit interaction, self-employment tax in detail, partial-year qualifications, or high-cost locality housing caps. This is not tax advice. Consult a CPA or tax attorney experienced in expatriate taxation for your specific situation.

Conclusion

The FEIE can wipe out your federal income tax on foreign salary, but the stacking rule and the self-employment tax surprise most expats. Run your numbers here, then check whether the Foreign Tax Credit beats the FEIE if you pay tax in a high-rate country. For the U.S. income side, pair this with our Tax Calculator and the Self-Employment Tax Calculator.

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