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.

The Inflation Reduction Act (IRA) is set to bring about transformative changes in IRS operations and audit practices starting in 2025. This comprehensive legislation, aimed at curbing inflation, reducing the federal deficit, and fostering economic stability, includes significant provisions for enhancing the capabilities of the Internal Revenue Service (IRS). Businesses can expect a substantial increase in IRS audits and more rigorous enforcement of tax compliance in the coming years.