Tax Law (Questions About Taxes)/form 2555


I have lived in china for a number of years and always filed the foreign earned income(form 2555) as im employed locally in china. Previous years I earned less than the maximum foreign earned income exclusion (example 95,100 for 2012) and the form was easy to fill out. In 2013 I made more (over $120K) than the income exclusion (2013 is $97,600). Does this mean I need to pay taxes on the difference (anything over the $97,600). Previous years I just carried the number over to F1040 as I has no other deductions. It does not explain anywhere what to do if you exceed the $97,600. I have done these forms for a number of years but this year is different

Hi Kurt, income over the exclusion amount is considered taxable income. However, if you have paid any income taxes in China, it is possible that a portion of the U.S. tax may be offset by claiming the foreign tax credit. Below is an article that I have written that explains the Foreign Tax Credit:


Best regards,

Tax Law (Questions About Taxes)

All Answers

Answers by Expert:

Ask Experts


Randall Brody, EA, MBA, CCP


Tax Samaritan is a boutique firm specializing in the preparation of taxes and the resolution of tax problems for Americans living abroad, as well as the unique tax issues that apply to taxpayers that are gamblers, teachers, nurses and military.


Get Expert U.S. Tax Preparation Wherever You Live We Built Our Company By Helping People With Their Tax And Financial Goals We can make a difference for you too! Tax Samaritan is a highly specialized boutique firm of Enrolled Agents providing tax solutions and wealth management for U.S. taxpayers with a special focus on assisting Americans living abroad. We strive to make U.S. tax preparation both accessible and easy for our clients. If you’re a U.S. citizen and live abroad, it’s likely that you still need to file a U.S. tax return and we can help make this an easy process for you. Our tax and financial services are very straightforward. We want to help solve your tax and financial issues and enhance your financial situation.

National Association of Enrolled Agents, National Association of Tax Professionals

Enrolled Agent (EA) Certified Compensation Professional (CCP) University of Phoenix: Masters of Business AdministrationCalifornia State University, East Bay: Bachelors of Science, Finance.

Past/Present Clients
We have served thousands of clients worldwide in the last 20+ years.

©2016 All rights reserved.