What about a married couple where both spouses live and work

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Case Study: You recall the basics of the foreign earned income exclusion (FEIE) from your individual tax course. Among other things, you recall that the FEIE is not unlimited - i.e., qualified taxpayers may exclude FEI amounts up to the applic-able annual maximum exclusion, an amount which is adjusted annually for in-flation. On 2022 returns the maximum FEIE is $112,000. On 2023 returns the maximum FEIE will be $120,000.

Question: But what about a married couple where both spouses live and work in a foreign country and they file jointly (MFJ)? Are they each entitled to up to the annual maximum FEIE so that their total exclusion could be up to $240,000 for 2023? Or is the annual maximum really a "per-return" rule, such that only $120,000 will be available on a 2023 MFJ return regardless? Where in the regulations do we find the answer, and what is the answer?

 

Reference no: EM133553867

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