Key Takeaways
• U.S. citizens in Singapore can exclude up to $130,000 from federal taxes using the Foreign Earned Income Exclusion in 2025.
• Qualify by passing either the Physical Presence Test (330 days abroad) or Bona Fide Residence Test (full calendar year).
• Always file a U.S. tax return and IRS Form 2555, keeping detailed travel and income records for compliance.
If you are a U.S. citizen or green card holder planning a move to Singapore 🇸🇬, your tax situation will likely change quite a bit. The United States 🇺🇸 taxes its citizens and permanent residents on worldwide income, which means you’ll still need to file a tax return, even after you settle abroad. However, you may not need to pay U.S. tax on all your earnings thanks to something called the Foreign Earned Income Exclusion. This special rule can help shield a large part of your income from U.S. taxes if you qualify. Here’s a simple, step-by-step breakdown of how this works, why it matters, and what to watch for if Singapore 🇸🇬 becomes your new home.
Checklist Before You Begin
- Are you a U.S. citizen or green card holder?
- Do you plan to work and live in Singapore 🇸🇬?
- Will your main income be from a job or self-employed work in Singapore 🇸🇬?
- Are you ready to track all the days you are in and out of the United States 🇺🇸?
- Do you know how to keep careful records for taxes?
- Will you open a bank account and find a home in Singapore 🇸🇬?
Keep this list handy as you work through the steps below.
Step 1: Understand What the Foreign Earned Income Exclusion Means
The Foreign Earned Income Exclusion lets qualifying Americans and green card holders exclude a set amount of their foreign-earned income from U.S. federal income tax each year. For tax year 2025, this amount rises to $130,000. If you earn money from working in Singapore 🇸🇬, and you meet the special IRS rules, you might not have to pay U.S. tax on the first $130,000 you earn.
- This exclusion only applies to “earned income.” That means wages, salaries, bonuses, or self-employment income you receive for work done in Singapore 🇸🇬.
- Income from things like interest, dividends, or rental profits is not covered.
Analysis from VisaVerge.com suggests that the Foreign Earned Income Exclusion provides real relief for Americans abroad, but only if you pay close attention to details like where your “tax home” is and how many days you spend outside the United States 🇺🇸.
Step 2: Figure Out Where Your “Tax Home” Is
The IRS wants to know where your real work life is based. Your “tax home” is usually the place where you do most of your work and have your strongest connections. If you lease an apartment, open a bank account, or take steps to show Singapore 🇸🇬 is where you now live and work, it helps prove this is your main tax home.
- If you are just traveling or do not set down any roots in Singapore 🇸🇬, you may not convince the IRS it’s your real tax home.
- Key tip: As soon as you move, take steps like signing a lease or registering for utilities in your new city.
Step 3: Pass a Qualifying Test (Physical Presence or Bona Fide Residence)
The IRS won’t simply take your word for it that you live abroad. You must qualify in one of two ways:
A. Physical Presence Test
– You must spend at least 330 full days outside the United States 🇺🇸 in any 12-month period.
– Only full days count. A day in which you are in the U.S. for part of the time doesn’t count.
– This test is helpful for people early in their move to Singapore 🇸🇬, or those who travel a lot but still spend most days overseas.
B. Bona Fide Residence Test
– You must prove you are a true resident of Singapore 🇸🇬 for an entire calendar year (January to December).
– The IRS looks for things like a long-term lease, a job contract, and family or community ties in Singapore 🇸🇬.
– Short visits back to the U.S. are allowed, but your main life must stay rooted in Singapore 🇸🇬 during that year.
It’s often easier for new arrivals to use the Physical Presence Test their first year, then consider the Bona Fide Residence Test after they have spent an entire calendar year in Singapore 🇸🇬.
Step 4: Work Out Which Income You Can Exclude
The Foreign Earned Income Exclusion applies only to income you earn for working. For example:
– Wages or salary from a job with a company in Singapore 🇸🇬.
– Bonuses paid for work done in Singapore 🇸🇬.
– If you’re self-employed and working while in Singapore 🇸🇬, the money you earn also counts.
Not allowed as excluded income:
– Income from investments (interest, dividends).
– Profits from property, such as rent collected from a house you own.
– Money from the U.S. government if you work as a government employee abroad.
Step 5: Consider the Foreign Housing Exclusion
Living in Singapore 🇸🇬 can be expensive. The IRS allows a separate exclusion for qualified housing expenses above a certain amount. For many Americans in high-cost places like Singapore 🇸🇬, this can mean extra tax relief.
- The basic threshold is about $20,200, but for high-cost cities, you could exclude up to $84,100 in qualified housing expenses (like rent and utilities, but not phone bills).
- This can help lower your taxable income even more. To see if you qualify and for how much, review official IRS guidelines for housing exclusions.
Step 6: Always File a U.S. Tax Return
Even if you earn less than $130,000, you must file a U.S. tax return every year. To claim the Foreign Earned Income Exclusion, you must fill out and submit IRS Form 2555 each year.
- You can find Form 2555 directly on the official IRS website.
- Be sure to include all supporting paperwork and keep copies for your records.
Important: If you skip filing your tax return or Form 2555, you may lose the right to claim the Foreign Earned Income Exclusion for that year.
Step 7: Use the Right Currency Exchange Rate
All U.S. tax returns must be completed in U.S. dollars (USD). If you earn income in Singapore dollars (SGD), you’ll need to convert all amounts using an IRS-approved exchange rate.
- The IRS prefers that you use a consistent, reasonable rate throughout the year.
- Save your conversion calculations in case the IRS asks for proof.
Step 8: Watch Out for Other U.S. Tax Rules
There are some other things you might need to keep in mind:
- Self-employment taxes: If you are self-employed abroad, the Foreign Earned Income Exclusion can reduce your regular income tax, but it does not lower your self-employment tax. You may still owe this.
- Double taxation: Sometimes, you might get taxed by both Singapore 🇸🇬 and the United States 🇺🇸 on the same earnings. If this happens, you could use the Foreign Tax Credit instead or combine it with the Foreign Earned Income Exclusion to lower your U.S. tax bill.
- Government employees: If you work for the U.S. government while living overseas, your salary is not eligible for the Foreign Earned Income Exclusion, but private contractors could qualify.
Step 9: Keep Careful Records
Keep track of:
– Travel dates (arrivals and departures for all countries)
– Your employment agreements/contracts in Singapore 🇸🇬
– Rental leases and receipts for housing costs
– Documents like Singapore bank account statements and utility bills
This paperwork will help if the IRS ever checks your claim.
Step 10: What If You Move in the Middle of the Year?
If your move doesn’t line up with the start of the year, you may still qualify for a “partial-year” exclusion. For instance, say you arrive in Singapore 🇸🇬 in August and stay for the next 12 months without spending much time in the U.S.—you may pass the Physical Presence Test and claim a pro-rated benefit for the time spent abroad.
- Double-check which months you qualify for, and only exclude income earned during those months.
Step 11: Plan for Future Years
Once you’ve completed a full calendar year living in Singapore 🇸🇬, you might choose to qualify under the Bona Fide Residence Test, which will often make it easier to keep getting the Foreign Earned Income Exclusion in future years—especially if your life is rooted in Singapore 🇸🇬.
Common Mistakes and How to Avoid Them
- Not tracking days accurately: Even one mistake about how many days you spent in or out of the U.S. can cost you the exclusion.
- Filing late: You must file your U.S. tax return and Form 2555 on time. Extensions are possible, but don’t assume you’ll get them without taking the right steps.
- Omitting income: Make sure you report all income, even if you are excluding it from your taxable income. The IRS requires a clear, full picture.
- Mixing housing costs: Only specific housing costs (like rent and utilities) count for the housing exclusion, and there are maximums set by the IRS, especially for high-cost cities like Singapore 🇸🇸.
What to Expect After Filing
After you file your tax return claiming the Foreign Earned Income Exclusion and any housing exclusions:
– You’ll receive confirmation from the IRS if your forms were received.
– If the IRS has questions, they may ask you to provide more proof (travel records or proof of housing in Singapore 🇸🇬).
– Watch for any follow-up letters and respond quickly to avoid problems.
If you qualify, you’ll only pay U.S. tax on income that goes over the exclusion limit, or on income not covered, like investments or U.S.-source income.
Where to Get More Help
- For official IRS rules and limits about the Foreign Earned Income Exclusion and housing exclusion, visit the IRS’s official Form 2555 resource page.
- If you have complex income streams, are not sure about your status, or run into issues with self-employment or dual taxation, you might want to talk to a tax accountant who knows both U.S. and Singapore 🇸🇬 rules.
- The Singapore tax authority website also has details for Americans working there.
Summary of Key Points
- The Foreign Earned Income Exclusion lets qualifying Americans and green card holders in Singapore 🇸🇬 exclude up to $130,000 in 2025 from U.S. federal income tax.
- You must pass either the Physical Presence Test (330 days abroad in 12 months) or the Bona Fide Residence Test (one full calendar year as a resident).
- You can also claim extra relief through the housing exclusion in high-cost places like Singapore 🇸🇬.
- Always file a U.S. return and Form 2555—even if no U.S. tax is due.
- Keep detailed travel, housing, and income records.
- Consider talking with a tax expert if your situation is unusual or if you work for yourself.
By carefully following these steps, you can benefit from the Foreign Earned Income Exclusion and possibly the housing exclusion while working and living in Singapore 🇸🇬, helping you save on your taxes and focus on your new adventure abroad.
Learn Today
Foreign Earned Income Exclusion → A U.S. tax provision letting qualifying Americans exclude a specific amount of income earned abroad from federal income tax.
Physical Presence Test → IRS test requiring at least 330 full days spent outside the United States in a 12-month period to qualify for exclusions.
Bona Fide Residence Test → A test to prove you were a true resident of a foreign country for an entire calendar year; required for certain exclusions.
Form 2555 → IRS form submitted annually to claim the Foreign Earned Income Exclusion and housing exclusion for Americans working abroad.
Tax Home → The location where you work and have your strongest ties, determining eligibility for certain U.S. tax exclusions when living overseas.
This Article in a Nutshell
Moving to Singapore as a U.S. citizen or green card holder changes your tax responsibilities. The Foreign Earned Income Exclusion allows you to exclude up to $130,000 of foreign-earned income if you qualify. Always file IRS Form 2555 yearly, track your days abroad, and keep thorough records for U.S. tax compliance.
— By VisaVerge.com
Read more:
• Indian man charged in Singapore for molesting Singapore Airlines crew
• Remittances from Indians in Singapore and advanced economies on the rise
• India-Singapore Air Traffic Reaches Record 5.5 Million
• Understanding Singapore’s Long-Term Visit Pass: A Complete Guide
• Your Complete Guide to Singapore’s Student’s Pass: What You Need to Know
