Foreign Based Pilots

If you were based at a foreign domicile there are two different ways to file. The first is by taking a credit for any taxes that you have paid to a foreign country against the tax due the U.S. This method must be used if you were domiciled out of the U.S. for less than one calendar year. You will need to provide documentation on the total income earned abroad and the amount of foreign tax paid.

The second way is to claim the Foreign Earned Income Exclusion; the dollar amount of this exclusion for 2018 is $104,100.00. To take advantage of this exclusion, you must meet one of two tests – the Bona Fide Residence Test or the Physical Presence Test. To meet either test, you must live in or be present in a foreign country. A foreign country usually is any territory (including the air space and territorial waters) under the sovereignty of a government other than that of the United States.

For detailed information on both tests as well as a general summary, click on the following links:

Your income is inclusive of any amounts paid to you by or on behalf of your foreign employer. These would include any of the following sources:

Income Sources:

  • Base Salary
  • Position/Experience Pay
  • Bonus Pay
  • Overtime Pay
  • Vacation Pay
  • Profit Sharing
  • Travel/Commuting Allowance
  • Utilities Allowance
  • Telephone Allowance
  • Education/School Allowance
  • Medical/Miscellaneous Reimbursements
  • Employer Contributions to Foreign Pension
  • Other Foreign Earned Income

Expenses if qualified:

  • Housing – Rent or Lease Only
  • Repairs
  • Utilities – Gas, Electric, Water/Sewer etc.
  • Insurance – Rental or Personal Property
  • Occupancy Taxes
  • Non-refundable Security Deposits
  • Furniture Rental (not purchase)
  • Residential Parking Fees

We must have a copy of your Year End Audit Report providing the number of trips and each destination.

Our base fee for a Foreign Income return is $395 (income exclusion only) and $425 (income exclusion and foreign tax credit).