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ONLY United States taxpayers are eligible for the foreign income tax exclusion. The very first thing to remember despite popular belief is that there are two separate tests to meet in order to claim the foreign income tax exclusion.

a) PHYSICAL PRESENCE TEST: The physical presence test easiest of the two test to understand and the hardest to achieve.

b) BONAFIDE RESIDENCE RULE: This is the other test. This is most missed by taxpayers and accountants alike.

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