In 2023, what is the maximum foreign earned income a taxpayer can exclude?

In 2023, the maximum foreign earned income that a taxpayer can exclude is indeed $120,000. This exclusion is part of the foreign earned income exclusion, which allows U.S. citizens and resident aliens living abroad to exclude a certain amount of their foreign earned income from taxable income on their federal tax return.

The limit is adjusted annually for inflation, and for 2023, it has been set at $120,000. This helps to provide tax relief to those working abroad, allowing them to retain more of their earnings without incurring U.S. taxes on that income. Understanding this threshold is crucial for taxpayers who qualify for the exclusion, as it directly impacts how much of their income will be subject to U.S. taxation.

Continuous updates to this figure highlight the importance of staying informed about current tax laws, particularly for expatriates or those considering employment outside the United States. This ensures that taxpayers maximize their potential exclusions and optimize their tax responsibilities effectively.