Some have stated how an FDA pilot gets to keep his margin on the foreign earned income exclusion. As fas as I know, this only applies without an equalization package.
For example, assume you bid, and accept an FDA to Paris. Assume also you move over there using existing CBA language. Assume, LOA or not, that you're in it for the long haul with your French wife.
For this person, he is subject to the ENTIRE hit on taxes paid to the French gov't. They have a graduated tax scale, which is slightly higher than ours in the US. So you pay off the French, in year x. Then you file your US taxes in year x. As you fill out the 1040 all those taxes paid to France go against your US tax burden. Voila. You filed your perfunctory 1040 showing you owe Uncle Sugar nothing more.
You might have an $82k exclusion. But it does you no good unless you live in a foreign country that has LESS tax liability than the US. So, FedEx "keeping" your margin from $82k just isn't how that works.
Under the equalization program (generic guy) the DIFFERENCE between total tax liability in the US versus your liability in the FDA is paid by Fred. This aparently includes a gross-up provision (the tax on the benifit) added in to preclude any further out of pocket "post equalization" expense. Price Waterhouse, Coopers might not even have to fill out the foreign earned income form, since they can already show you paid enough French tax already, again a zero US tax burden since you paid MORE than that in France.
Hope that helps.
STILL NO!
