Foreign travel, prior to moving

In the year 2010, I moved overseas on April 23.  My 12 month physical presence started April 23, 2010-April 22, 2010.  During that time I was back in the USA for a total of about seven days (five business) days and I gather I'll have to calculate those days out as being "US income".

However, prior to April 23, I was on foreign travel for a total of 13 days.  Do those 13 days also count as "foreign income" or, since I didn't really move over until April 23, are those days just sort of lost since they didn't occur during the 12 month period of the physical presence?

Any ideas?  I imagine it's similar to those who take a recon trip to the UK prior to the move.  How do you handle those days which fall within the tax year but prior to your actual move over?
 
 

You may be calculating the physical presence period incorrectly. You should use your 330th full day of physical presence outside the US as the end of your qualifying period, then count backwards 12 months to find the beginning. According to the IRS: "You do not have to begin your 12-month period with your first full day in a foreign country or end it with the day you leave. You can choose the 12-month period that gives you the greatest exclusion." See http://www.irs.gov/publications/p54/ch04.html.

Note that even though your qualifying period may start before you moved, you can still only exclude earned income from foreign sources, as US source income is taxable regardless of whether or not you receive it during the physical presence qualifying period.

You do however seem to have some foreign source income prior to moving which of course gives you capacity to claim more foreign tax credits.

Thanks.  I just discovered the +330 - 12 concept.  That won't bring back those earlier days but will enhance the overall number of days I was "out of the country". 

My taxes are quite weird this year.  It's part-year US and overseas, but also because of our work for an international organization there are special rules for our Self Employment taxes, meaning I use one number for income tax based on the 365-days in the period and another rule for SE tax, 365-all days overseas. 

Next year I put 365 days and be done with it. 

Thanks for the help.

With all due respect, the

you can still only exclude earned income from foreign sources, as US source income is taxable regardless of whether or not you receive it during the physical presence qualifying period.

is an incorrect statement.

Foreign income exclusion has nothing to do with the source of income. Many expats work outside of the U.S. (also in UK) and exclude foreign income regardless of the income source. The IRS even has a special form that allows the employer to cease withholding of federal tax while the employee works overseas. Of course, FICA taxes continue being withheld.

Source of income is a critical concept for the purpose of Foreign Tax Credit (see http://www.taxesforexpats.com/expat-tax-advice/foreign-tax-credit.html. In order to calculate the allowed amount of foreign tax credit, there should be sufficient amount of the foreign income of the particular income category earned.

Thanks for the correction. As copied from the IRS:

Foreign earned income generally is income you receive for services you perform during a period in which you meet both of the following requirements.

    Your tax home is in a foreign country.

    You meet either the bona fide residence test or the physical presence test.

So what matters is the OP's tax home at the time the work was done.

See http://www.irs.gov/publications/p54/ch04.html#en_US_2010_publink100047450