Who can use Form 2555-ez?

When can I use Form 2555-EZ?

The Foreign Earned Income Exclusion allows taxpayers to exclude their foreign earned income up to $100,800 in 2015 and $99,200 in 2014.  In order to use the Foreign Earned Income Exclusion, the taxpayer must file Form 2555 or Form 2555-EZ along with Form 1040,  the year end tax return.

Form 2555 is a tedious form to fill out, due to its many questions and need for accurate record keeping.  Form 2555-EZ is a simplified version of Form 2555, however, the taxpayer must make sure that all the criteria apply.  Firstly, the taxpayer must be a US Citizen or resident alien.  Secondly the Taxpayer must have earned foreign wages of $100,800 or less.  If the taxpayer earned more than that amount, then the taxpayer may exclude up to $100,800, however, the remainder may be considered taxable income.

The next criteria is that the taxpayer must be filing a calendar year return that covers a twelve month period.  If the taxpayer has a different year end, then a 2555 must be used.

The next criteria are more common.  The taxpayer cannot have self employment income that he wants to exclude.  Self employment income can only be excluded on the Form 2555.  Next, the taxpayer cannot have business/moving expenses.  If the taxpayer wants to exclude business and moving expenses, then the taxpayer needs to use the Form 2555.  Lastly, the taxpayer cannot claim the foreign housing exclusion or deduction on the Form 2555-EZ.  If the taxpayer wants to claim the foreign housing deduction, then the taxpayer needs to file the Form 2555.

Some tax software programs do not give an option to use the 2555-EZ.  Even is a taxpayer is able to use the Form 2555-EZ, it does not mean that the taxpayer is required to use the form.  If the taxpayer is using tax software that does not allow use of the Form 2555-EZ, then the taxpayer should use Form 2555.

Where to mail Form 2555-ez?

Form 2555-ez should in included as part you your Form 1040.  It should be mailed with your Form 1040 to wherever you mail your 1040. For more information on where to mail your 1040, see the IRS website.  If you are efiling, then your Form 2555-ex will be send automatically with your tax return.

If you have any questions about which form to file, feel free to send us an email at taxquestions@universaltaxprofessionals.com.