I'm a United States citizen and I have an opportunity to work abroad. I was told by a friend that up to $103K of income earned abroad is not taxed by the IRS. First of all, is this true? Also, will I have to pay taxes in the country I'm going to but which I'm not a citizen of? I want to know specifically for the Netherlands and Kuwait.

  • 1
    The latter question depends on the country, so you should probably be specific rather than general; we have tax treaties with some countries, not with others.
    – Joe
    Apr 6, 2017 at 18:05
  • I see, I did mention Netherlands or Kuwait as examples
    – Exocomp
    Apr 6, 2017 at 18:06
  • What kind of work will you be doing? There are certain exceptions to federal tax withholding for US citizens abroad.
    – Michael
    Apr 6, 2017 at 18:14
  • @MichaelC. I will be doing computer programming.
    – Exocomp
    Apr 6, 2017 at 19:10
  • @Exocomp And how long will you be there for?
    – Michael
    Apr 6, 2017 at 19:37

1 Answer 1


To answer your first question, your friend is correct, except for the amount - it's $101,300 not $103,000. This is due to the Foreign earned income exclusion

One tax break for expatriates is the Foreign Earned Income Exclusion. If an American moves abroad, he or she can exclude foreign-earned income up to $101,300 as of 2016 from U.S. taxation. To qualify, that person must have lived outside the United States for 330 days in 12 consecutive months, said Wilson, a partner in the Denver law firm of Holland & Hart.

That means an expatriate making $75,000 overseas would pay no taxes, although he or she still must file IRS Form 1040 and claim the exclusion. If the expatriate makes $105,000, tax must be paid on the difference between his or her salary and $101,300, or $3,700. But if the expatriate visits the United States for more than 35 days in that period, the benefit is lost.

If there’s no government where the expatriate is living, the exclusion can’t be claimed. Wilson recalled a case in which Americans tried without success to claim the exclusion because they were living in Antarctica. The exclusion also can’t be claimed on the high seas, he said.

As for your second question, there is no personal income tax in Kuwait. For the Netherlands, you will typically have to file and pay taxes.

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