What is the Foreign Earned Income Exclusion limit for the tax year?

The Foreign Earned Income Exclusion allows U.S. taxpayers living abroad to exclude a certain amount of their foreign-earned income from U.S. taxation, which can significantly reduce their tax liability. For the tax year in question, the limit is set at $104,100. This figure is adjusted annually for inflation, which is why it can change from year to year.

The amount of $104,100 is the result of adjustments made to keep pace with inflation and reflects the limit established by the IRS for that specific year. This exclusion is beneficial for individuals working outside the United States, allowing them to retain a greater portion of their earnings without being taxed by the U.S. government.

In this context, the other value choices do not reflect the correct exclusion limit, making them not applicable for the tax year being referred to. Understanding these figures is essential for anyone dealing with payroll or tax issues related to foreign income, as it impacts the financial planning of expatriates and their tax responsibilities.