Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit.
For the person to qualify for the foreign earned income exclusion - he/she should: -- Work and reside outside the United States for at least 330 days during the year(Physical Presence test), or -- Meet either the Bona Fide test.If the person qualifies, he/she may exclude up to $92,900 (2011) in foreign wages. The amount of foreign earned income exclusion fro 2012 is $95,100.
Exclusion is not granted - to receive that exclusion - the taxpayer should file the tax return and attach the form 2555.