I am not an accountant, but know from perso

I am not an accountant, but know from personal experience that, as Americans, if your income comes from a place other than the United States, we can use the Foreign Earned Income Exclusion in order to exclude income on our income tax up to a certain level.  For me, for example, I live in Nicaragua and I don’t generate income from the United States, so I don’t have to pay income tax on the excluded amount.

 

As Americans we do, however, still have to file our income tax, regardless of how much money we make.

 

The Foreign Earned Income Exclusion is only for active income.  If you’re living outside the US and generate income from buying and selling stocks, for example, you’re going to still pay income tax on that part.