F or this tax filing season, though, you can go back and file all those returns you missed. You actually get to claim your Exclusion. They will entertain any reasonable offer to pay off the taxes due. We urge you to take immediate advantage, as the IRS is not known for altruistic acts. The Form 2555 will tell you that it is Earned Income and Remuneration.
Passive income is excluded.
Passive income from any source is taxed at your normal US rates, after your personal allowances are deducted. Your salary, obviously, is earned income. Less obviously, tuition for your children is defined as taxable remuneration. Clearly a senior staffer may be pushing the limit with little more than half that figure as actual salary. W hen accepting a contract with the school, you married couples can minimize your problems by taking advantage of BOTH your Exclusions.