Yes—you can legally reduce your U.S. tax bill through eligible pretax benefits and deductions, with additional relief only if your work or taxes genuinely qualify as foreign.

You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for the calendar year.

You can be both a nonresident and a resident for U.S. tax purposes during the same tax year.

U.S. residents are generally taxed in the same way as U.S. citizens. This means that their worldwide income is subject to U.S. tax and must be reported on their U.S. tax return.

If you're eligible under the plan, you generally can elect to have your employer contribute a portion of your compensation to the plan on a pretax basis.

The annual contribution limit for employees who participate in 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan is increased to $24,500, up from $23,500 for 2025.

Beginning in 2026, participants of plans with Roth features offering catch-up contributions must make catch-up contributions on a Roth basis if prior-year wages with the plan sponsor exceeded $150,000 (for 2026) .

§ 3.01

For calendar year 2026, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $4,400. For calendar year 2026, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $8,750.

Health FSA and HRA

An employee covered by an HDHP and a health FSA or an HRA that pays or reimburses qualified medical expenses can’t generally make contributions to an HSA.

As of Jan. 1, 2026, bronze and catastrophic plans available through an Exchange are considered HSA-compatible, regardless of whether the plans satisfy the general definition of an HDHP.

Health flexible spending arrangements

For taxable years beginning in 2026, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements rises to $3,400.

Standard deduction

For tax year 2026, the standard deduction increases to $32,200 for married couples filing jointly. For single taxpayers and married individuals filing separately, the standard deduction rises to $16,100 for tax year 2026, and for heads of households, the standard deduction will be $24,150.

You should itemize deductions on Schedule A (Form 1040), Itemized Deductions, if the total amount of your allowable itemized deductions is greater than your standard deduction or if you must itemize deductions because you can't use the standard deduction.

§ 164(b)(6)(B)(ii)

in the case of any taxable year beginning in calendar year 2026, $40,400,

Beginning with tax year 2026, if you do not itemize, you may deduct up to $1,000 ($2,000 if filing jointly) of your cash contributions to certain qualified organizations.

To claim these benefits, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following:

For tax year 2026, the maximum exclusion is $132,900 per person.

If you paid or accrued foreign taxes to a foreign country or U.S. possession and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes.

You can't take a foreign tax credit for foreign taxes on income that you exclude under the foreign earned income exclusion or the foreign housing exclusion.

If you are a nonresident of the U.S., you cannot claim the standard deduction. However, students and business apprentices from India may be eligible to claim the standard deduction under Article 21 of the U.S.A.-India Income Tax Treaty.

If you or your spouse is covered by a retirement plan at work, your deduction may be reduced or eliminated.

An employer is responsible for withholding the Additional Medicare tax from wages or railroad retirement (RRTA) compensation it pays to an employee in excess of $200,000 in a calendar year, without regard to filing status.