1. Are Green Card holders considered to be resident aliens?
Yes - if you have been lawfully admitted to the U.S. for permanent
residency you are considered to be a resident alien, even if you are currently living outside of the U.S. Please see the Green Card page.
  
2. Who must file US Federal tax returns?
U.S. citizens and resident aliens (e.g. Green Card holders) are taxed on their world-wide income regardless of where it is earned, paid, or received. But by living abroad you get certain tax benefits that are not available in the U.S. Nonresident aliens (e.g. an individual without permanent residency in U.S.) are subject to tax only on their US source income.
  

3. Suppose I work for a foreign company?
If you work for a foreign company, you still need to report your income, and it has to be in US Dollars. Ask the company you work at for your total income in the calendar year. To convert it to US Dollars, you can use the average exchange rate for the year, which you can find at: www.usembassy.org.uk/irs/irsxchng.htm. In addition to salary, if you are reimbursed or receive an allowance for certain living expenses, you must include these amounts as income. Examples are cost of living allowances, overseas differential, housing reimbursement or allowance, education reimbursement for your children's schooling, reimbursement of home leave expenses, payment of foreign tax on your behalf, etc. You also need to report as income the fair market value of housing, a car, meals or other benefits provided by your employer.

  
4. What is the foreign earned income exclusion?
You qualify for the foreign earned income exclusion (up to $87,600) if you are a U.S. citizen or resident alien (e.g. Green Card holder), you have a tax home in a foreign country, and you meet either the foreign residence test or the physical presence test.

5. Can housing expenses be excluded or deducted?
You should calculate all your housing expenses, including amounts paid for rent, repairs, utilities, real and personal property insurance, furniture rental, residential parking fees, etc. These amounts will be used to calculate the foreign housing exclusion or deduction. Note that some expenses are not considered deductible housing expenses, such as mortgage interest payments, telephone charges, the cost of domestic help, purchased furniture, deductible taxes, or the cost of improvements to property. Generally, if your income is below the maximum exclusion for the year (currently $87,600), housing expenses are irrelevant because the housing exclusion or deduction will not benefit you.