Under an S corporation, can you deduct business expenses with respect to the foreign earned income exclusion?

Answer by Wray Rives:

Your earnings through the S Corp do not qualify for the Foreign Earned Income Exclusion.  The salary you receive from the S Corp may qualify, assuming you individually qualify otherwise.  S Corp pass through income is not earned income and does not qualify for the exclusion, so you can still deduct your normal business expenses on the S Corp tax return, but net earnings from the S Corp will be taxable on your individual US tax return.

Even if you qualify for the Foreign Earned Income Exclusion on your S Corp salary, your wages will still be subject to FICA and medicare tax, because you have a US employer.

Under an S corporation, can you deduct business expenses with respect to the foreign earned income exclusion?