The Foreign Earned Income Exclusion (FEIE) helps U.S. citizens and residents working abroad reduce their U.S. federal income tax burden by excluding up to $126,500 of foreign-earned income for 2024. To qualify, individuals must pass either the Bona Fide Residence Test or the Physical Presence Test and earn income from working in a foreign country. Benefits include reduced tax liability, simplified tax reporting, and potential additional benefits like the Foreign Housing Exclusion.