Question

Mio was transferred from New York to Germany. He lived and worked in Germany for 342 days in 2019. Mio's salary for 2019 is $286,400. Assume a 365-day year. In your computation, round any division to four decimal places before converting to a percentage. For example, 0.473938 would be rounded to 0.4739. If required, round your final answer to the nearest dollar. What is Mio's foreign earned income exclusion? 99,226.8493 X

Help on this please, the answer is not 99,226.8493 99226 99227 so please do not reply with that.

Answer 1

Ans:

Under this global system, a U.S. citizen who earns income in another country could experience double taxation: the same income would be taxed in the United States and in the foreign country. Out of a sense of fairness and to encourage U.S. citizens to work abroad (so that exports might be increased), Congress has provided alternative forms of relief from taxes on foreign earned income. The taxpayer can elect either (1) to include the foreign income in his or her taxable income and then claim a credit for foreign taxes paid or (2) to exclude the foreign earnings from his or her U.S. gross income (the foreign earned income exclusion).
Foreign earned income consists of the earnings from the individual's personal services rendered in a foreign country (other than as an employee of the U.S. government). To qualify for the exclusion, the taxpayer must be either of the following:
• A bona fide resident of the foreign country (or countries).
• Present in a foreign country (or countries) for at least 330 days during any 12 consecutive months.
The amount of the foreign earned income exclusion changes each year. Persons who qualify are eligible to exclude up to $105,900 in foreign earned income for 2019.
Mio's exclusion is limited to $99,228 computed as follows:

Percentage exclusion- 342 days / 365 days *100 = 93.70%
$105,900 (2019 limit) × 93.70%= $99,228.30, rounded to $99,228