Will you check my logic in an example IRS scenario with foreign earned income exclusion?

Question

Suppose I lived in the U.S. between Dec. 8th and Dec. 30th, 2007. Then, I lived in a foreign country between Dec. 31st, 2007 until Dec. 31st, 2008.

When I fill out my IRS filing for 2008 tax year, I will qualify for the earned income exclusion based upon the the physical presence test. My question is: Is it OK for me to use the dates "Dec. 8th, 2007 until Dec. 7th, 2008" for my physical presence test, and if so, how can I calculate how much of my earnings would NOT be eligible for the earned income exclusion? For instance, suppose that I made U.S.$30,000 for the year, how much of that would not be eligible based upon the physical presence test, since I was in the U.S. for 23 days of the physical presence test? Would it be 23/365 * $30,000 = $1890?

I'm basing most of my logic on this tax article: http://taxes.about.com/od/taxhelp/a/ForeignIncome_3.htm

Answer 1

If, on your 2008 tax return you list 12/8/2007 to 12/7/2008, you'd still have 343/366 days of exclusion.  Roughly $80,314.  Since your income is less than that, ALL of it is still excluded.