Bona Fide Residence vs Physical Presence Test

Choosing between bona fide residence and physical presence tests: Physical Presence Test: Requirements: 330 full days in foreign countries during any 12-month period. Advantages: Objective, mathematical test. Easier to document and prove. Can be used immediately upon meeting requirements. Disadvantages: Must track days meticulously. US travel limited to 35 days per year. No partial year benefits if requirements not met. Best For: Digital nomads, contractors with defined assignments, those who travel frequently between foreign countries. Bona Fide Residence Test: Requirements: Bona fide resident of foreign country for uninterrupted period including entire tax year. Factors Considered: Intent to remain indefinitely, permanent housing, family location, business ties, voter registration, social connections. Advantages: More travel flexibility to US. Partial year exclusion available in first/last year. Once established, easier to maintain. Disadvantages: Subjective determination, harder to prove, requires genuine residential ties. Best For: Long-term expatriates, those with permanent foreign assignments, families relocating abroad. Recommendation Strategy: First Year Abroad: Often use physical presence test for immediate benefit. Established Expats: Transition to bona fide residence for flexibility. Short Assignments: Physical presence test typically better. Documentation: Maintain detailed records regardless of test chosen. Consider using both tests as backup qualifying methods.