# US Citizen, Expat in UAE. Foreign Earned Income Exclusion & the AMT?



## FutureUAEExpat (Oct 25, 2016)

Hello All,

I am a US citizen who recently received an offer to work in the UAE. Although I will not pay any local income taxes in the UAE, I will qualify for the foreign earned income exclusion on my US return. My question is whether or not I will be subject to pay the Alternative Minimum Tax (AMT) in the US on my income?

I think it is best to give a simplified hypothetical to help answer my questions:

-Single
-Starts working in the UAE on 01/01/2016 on a 2 year contract
-Salary is $101,300 USD
-2016 Foreign Earned Income Exclusion $101,300 USD
-No other sources of income

*Will I be subject to the Alternative Minimum Tax (AMT) & if so approximately how much will my liability be?*


I've tried and tried to read through the complicated IRS form instructions and search the web for answers without any luck. I would greatly appreciate your help as the tax implications are playing a large part into whether or not I will accept this position.

Thanks!!

Travis


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## Bevdeforges (Nov 16, 2007)

Why don't you try running your situation through the IRS' Alternative Minimum Tax Assistant https://www.irs.gov/taxtopics/tc556.html?_ga=1.70073305.899109455.1460720240

If all your income is excludable under the FEIE and you have no other sources of income, chances are that the AMT will not apply, or will be pretty minimal. But to be sure, pull up a form 6251 from the IRS website and run your numbers down the first page to see what (if anything) comes up.
Cheers,
Bev


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## FutureUAEExpat (Oct 25, 2016)

Thanks for your response Bev!

I actually tried that and unfortunately I keep getting the following error "The whole dollar amount for Form 1040, Line 21 must be a positive amount" even though the foreign earned income exclusion for which I will qualify will be listed as a negative amount on this line per the instructions of Form 2555 Foreign Earned Income:

(From Line 45 of Form 2555) "Subtract line 44 from line 43. Enter the result here and in parentheses on Form 1040, line 21. Next to the amount enter “Form 2555.” On Form 1040, subtract this amount from your income to arrive at total income on Form 1040, line 22."

I'm fairly confident I will not be subject to AMT but I wish our government just made this all a bit less complicated to I can have a little extra piece of mind in this decision .


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## Bevdeforges (Nov 16, 2007)

It depends, I guess, on which tax preparation program you're using. But I would expect any tax prep program that includes form 2555 to be able to put the number (in parentheses, as requested) on line 21.

This is one of the reasons some of us find it easier to do the returns manually rather than to try and work out the peculiarities of each tax program. 
Cheers,
Bev


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