Alternative Minimum Tax (AMT) Abroad
FEIE can trigger AMT for high-income expats. Calculate your AMT exposure, exemption phase-out, and strategies to minimise it.
Income Details
AMT & FEIE Interaction
FEIE Creates AMT Risk: Under the AMT system, the FEIE exclusion is added back to income. This means expats who claim FEIE may have AMT income significantly higher than their regular taxable income, potentially triggering AMT.
Strategy: If AMT is triggered, consider switching from FEIE to FTC (Foreign Tax Credit). FTC can offset both regular tax and AMT. However, revoking FEIE is irrevocable for 5 years.
ISO Exercise: Incentive Stock Option exercise spreads are a common AMT trigger for expats at US tech companies. The spread is not taxed for regular tax but IS included in AMT income.