Question:   I am a U.S. citizen working for a U.S. firm in a foreign country. Is any part of my wages or expenses tax deductible?

Answer:    

• U.S. citizens and resident aliens are taxed on their worldwide income.
• Some taxpayers may qualify for the foreign earned income exclusion and  foreign housing exclusion, or foreign housing deduction, if:
      o Their tax home is in a foreign country,
      o They are U.S. citizens who are a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
      o They are U.S. resident aliens who are a citizen or national of a country with which the United States has an income tax treaty with a nondiscrimination article in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
      o They are U.S. citizens and resident aliens who are physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
• Taxpayers may be able to claim a foreign tax credit if required to pay a foreign income tax to the foreign country, if he or she has not elected the foreign earned income exclusion with respect to that income.
• Taxpayers may also qualify to deduct away from home expenses (for travel, meals, and lodging), but not against excluded income.