What can you do if you are a U.S. citizen working abroad and you have a non-US citizen spouse (resident alien) who also earns a substantial income? How can you benefit from the exemption on Foreign Earned Income?
You can file married filing separately and not include the spouses income. However, filing married jointly permits a much larger standard deduction, which may outweigh any additional tax on the spouses income if it is small. In any case, the resident alien spouse may be used as a personal exemption.
If your principal residence and workplace is abroad, and you have a house or condominium in the US, and rent it out for a partial or entire year, the rental income is considered US source income. However, of all my clients who have rental properties in the US, none has paid any income tax because of one very important deduction in addition to all the maintenance and tax costs.