I’ve been made an offer to work for a U.S. company/defense contractor. In a few months, the role would move me out near Tokyo and I would be moving there with my spouse. The team and recruiter involved have implied multiple times that I would essentially pay no Federal income taxes but have not pointed to any specific IRS docs. I’m just trying to clarify if I would qualify for FEIE.
Some specifics:
* I would be making about $1XXk/year as a base salary plus a Living Quarters Allowance (LQA) of about $30k/year that only kicks-in when I’m abroad
* I will be a civilian employee of a U.S. based private firm, doing work for a U.S. military entity, I will be in Japan on SOFA
My questions & concerns:
* Do I qualify for FEIE?
* The IRS page on FEIE states that “Pay received as a military or civilian employee of the U.S. government or any of its agencies” is not foreign earned income, but does not specify the case for contractors:
* [https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion](https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion)
* I will be moving to Japan around October, so I assume I can’t qualify for FEIE on 2024 income, only 2025 if I work there for most of the year or is this wrong? (330 days I think)
* My spouse may or may not be working for a U.S. organization remotely but she may also seek employment locally. I realize she may have to pay Japanese taxes but she would potentially avoid paying U.S. Federal income tax on top of that
This may be the best opportunity I have to move abroad, but I will have to soak up a salary lower than my current for \~6 months while working the new role in the U.S. so I’m trying to quantify my earnings situation over the next couple years. I didn’t think I would be so hesitant to accept a job in Japan after doing a decent amount of preparation but I don’t want to be surprised with $40-50k in unexpected taxes. Appreciate any help!
by oneronin