I've been putting 1% of my pretax pay into a standard 401k (which isnt squat, I know). I hit my 330 day mark in august and elected to stop paying income tax.

Would it be beneficial to move that contribution to a Roth IRA?

I know jack about investing so go easy. I do plan on increasing the contribution too.

First, I'd suggest talking to your CPA/EA to make sure you qualify for the foreign earned income exclusion before making any rash decisions.  I'd also discuss with them how the exclusion interacts with the contribution limitations for Roth IRAs (I honestly don't know).

That being said, if you income is not being taxed then the Roth would be a no-brainer if you are eligible to contribute.  However, you can only contribute 5500 this year and 6000 next year.  Does your 401k have a Roth contribution option?

Pretty sure you'd have to have claimed US income in order to be allowed to fund Roth or regular IRA.
I know you have to normally have income in order to be eligible for contributions.  Just don't know the exact rules for your situation.
You probably need advise from and advisor versed in this type situation.

I do qualify for the exclusion which is nice. I work for aecom on a US Army base, and they offer a myriad of options including the Roth. Of all the things they have here a cpa isnt one of them sadly. I know absolutly nothing about investing or retirement accounts.

OP, I have been working overseas for years.  Before you do anything, check these guys out.  I have used them for years and they had come recommended from some guys over here.  Even if you do not hire them, they will answer all of the questions you have and will give you options.

Thank you!!!

First of all, just to be clear, if you are a U.S. citizen or green card holder you must report your worldwide income on your U.S. tax return. You may have no income tax liability but you must file. Sometimes people are confused about that

The foreign earned income exclusion for 2018 is $104,100. You may also be able to deduct certain housing expenses in addition to this amount.

In 2018, the allowable maximum Roth IRA contribution begins to phase out at a modified Adjusted Gross Income of $120,000/$189,000 (single/MFJ) and the allowable contribution is fully eliminated at a modified AGI of $135,000/$199,000 (single/MFJ). The modified AGI in this case is your AGI plus the allowable earned income exclusion and allowable housing exclusion.

In addition, you cannot contribute excluded income to your Roth IRA.

Basically, if your income is low enough to be fully excluded you are ineligible to contribute to a Roth IRA unless you have other earned income not so excluded.

You also cannot contribute to a Roth IRA if the modified AGI exceeds $135,000 (single) and is rapidly phased out above a modified AGI of $120,000 (single).

Examples (assuming single filing status and ignoring foreign housing exclusion for the sake of simplicity):

1. You make below $104,101. You can exclude all earned income but cannot contribute directly to a Roth IRA.

2. You make at least $104,101 but not more than $110,109. You can take the full earned income exclusion and can contribute the remainder of your earned income to a Roth IRA.

3. You at least $110,100 but not more than $120,000. You can take the full earned income exclusion and contribute the maximum of $6,000 to a Roth IRA. This is the sweet spot. Your deductions/exemptions will take care of the rest of your non-excluded income but you still get the full Roth IRA contribution.

4. You make at least $120,001 but not more than $134,999. You can take the full earned income exclusion but your Roth IRA contribution will be limited based on how much your Modified AGI exceeds $120,000. For each $1,500 in excess of $120,000, your maximum allowable contribution will be reduced by $550.

5. You make $135,000 or more. You can take the full foreign earned income exclusion but you may not directly contribute to a Roth IRA.

Hope that helps.

Every situation is different and sometimes taking the foreign earned income exclusion yields a higher tax liability than simply claiming a foreign tax credit if you’re working in a high tax rate country and taxes were paid in that country.

I do expat taxes for a living. If you have any other questions feel free to PM me.

FWIW, I know Taxmonkey, Strat81, and a half dozen others here are tax professionals as well and have solid advice.

Ok, so Im a us citizen who makes WAY under the exclusion limit. 100% of income is non taxible. So I guess I fall under number 1. That sucks, but I'm glad you mentioned it as I just opted to put 4% into a roth. I can stop that in a couple days and slide it back into a standard 401k.