Foreign earned income exclusion a lower income taxpayer, even if the taxpayer is in a higher tax bracket. Foreign earned income exclusion The United States taxes citizens and residents on their worldwide income. Citizens and residents living and working outside the U.S. may be entitled to a foreign earned income exclusion that reduces taxable income. For 2017, the maximum exclusion is $102,100 per taxpayer, $103,900 for 2018 (future years indexed for inflation). In addition, the taxpayer may exclude housing expenses in excess of 16% of this maximum ($44.19 per day in 2015) but with limits. The exclusion is available only for wages or self-employment
Tax Freedom Day Tax Freedom Day Tax Freedom Day is the first day of the year in which a nation as a whole has theoretically earned enough income to pay its taxes. Every dollar that is officially considered income by the government is counted, and every payment to the government that is officially considered a tax is counted. Taxes at all levels of government – local, state and federal – are included. According to Neil Veldhuis, Director of Fiscal Studies, Fraser Institute, the purpose of Tax Freedom Day is to provide citizens of tax-paying countries with a metric with which to estimate their