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contributions to a nonexempt employees’

subtracting the deduction for the

behalf of, your employer if you have not

trust or to a nonqualified annuity contract.

employer-equivalent portion of

excluded it on line 25.

self-employment tax.

Income received in prior year. Foreign

Do not include deductible interest and

earned income received in 2010 for

taxes, any amount deductible by a

If capital is not an income-producing

services you performed in 2011 can be

tenant-stockholder in connection with

factor and personal services produced the

excluded from your 2010 gross income if,

cooperative housing, the cost of buying or

business income, the 30% rule does not

and to the extent, the income would have

improving a house, principal payments on

apply. Your entire gross income is earned

been excludable if you had received it in

a mortgage, or depreciation on the house.

income.

2011. To claim the additional exclusion,

Also, do not include the cost of domestic

Line 25. Enter the value of meals and/or

you must amend your 2010 tax return. To

labor, pay television, or the cost of buying

lodging provided by, or on behalf of, your

do this, file Form 1040X.

furniture or accessories.

employer that is excludable from your

Income earned in prior year. Foreign

Include expenses for housing only

income under section 119. To be

earned income received in 2011 for

during periods for which:

excludable, the meals and lodging must

•

services you performed in 2010 can be

The value of your housing is not

have been provided for your employer’s

excluded from your 2011 gross income if,

excluded from gross income under

convenience and on your employer’s

and to the extent, the income would have

section 119 (unless you maintained a

business premises. In addition, you must

been excludable if you had received it in

second foreign household as defined

have been required to accept the lodging

2010.

later), and

as a condition of your employment. If you

•

You meet the tax home test and either

If you are excluding income under this

lived in a camp provided by, or on behalf

the bona fide residence or physical

rule, do not include this income in Part IV.

of, your employer, the camp may be

presence test.

Instead, attach a statement to Form 2555

considered part of your employer’s

showing how you figured the exclusion.

Second foreign household. If you

business premises. See Exclusion of

Enter the amount that would have been

maintained a separate foreign household

Meals and Lodging in Pub. 54 for details.

excludable in 2010 on Form 2555 to the

for your spouse and dependents at a

left of line 45. Next to the amount enter

Part VI

place other than your tax home because

“Exclusion of Income Earned in 2010.”

the living conditions at your tax home

Line 28. Enter the total reasonable

Include it in the total reported on line 45.

were dangerous, unhealthful, or otherwise

expenses paid or incurred during the tax

adverse, you can include the expenses of

Note. If you claimed any deduction,

year by you, or on your behalf, for your

the second household on line 28.

credit, or exclusion on your 2010 return

foreign housing and the housing of your

that is definitely related to the 2010

Married couples. The following rules

spouse and dependents if they lived with

foreign earned income you are excluding

apply if both you and your spouse qualify

you. You can also include the reasonable

under this rule, you may have to amend

for the tax benefits of Form 2555.

expenses of a second foreign household

your 2010 income tax return to adjust the

Same foreign household. If you and

(defined later). Housing expenses are

amount you claimed. To do this, file Form

your spouse lived in the same foreign

considered reasonable to the extent they

1040X.

household and file a joint return, you must

are not lavish or extravagant under the

Line 20. If you engaged in an

figure your housing amounts (line 33)

circumstances.

unincorporated trade or business in which

jointly. If you file separate returns, only

both personal services and capital were

Housing expenses include rent, utilities

one spouse can claim the housing

material income-producing factors, a

(other than telephone charges), real and

exclusion or deduction.

reasonable amount of compensation for

personal property insurance,

In figuring your housing amount

your personal services will be considered

nonrefundable fees paid to obtain a lease,

jointly, either spouse (but not both) can

earned income. The amount treated as

rental of furniture and accessories,

claim the housing exclusion or housing

earned income, however, cannot be more

residential parking, and household

deduction. However, if you and your

than 30% of your share of the net profits

repairs. You can also include the fair

spouse have different periods of

from the trade or business after

rental value of housing provided by, or on

residence or presence, and the one with

the shorter period of residence or

presence claims the exclusion or

deduction, you can claim as housing

expenses only the expenses for that

Limit on Housing Expenses Worksheet—Line

shorter period. The spouse claiming the

29b

Keep for Your Records

exclusion or deduction can aggregate the

housing expenses of both spouses,

subject to the limit on housing expenses

(line 29b), and subtract his or her base

Note. If the location in which you incurred housing expenses is not listed in the table

housing amount.

beginning on page 5, and the number of days in your qualifying period that fall within the

Separate foreign households. If you

and your spouse lived in separate foreign

2011 tax year is 365, DO NOT complete this worksheet. Instead, enter $27,870 on line 29b.

households, you each can claim qualified

expenses for your own household only if:

1. Enter the number of days in your qualifying period that fall within the

•

Your tax homes were not within a

2011 tax year (see the instructions for line 31) . . . . . . . . . . . . . . .

reasonable commuting distance of each

other, and

2. Did you enter 365 on line 1?

•

Each spouse’s household was not

No. If the amount on line 1 is less than 365, skip line 2 and go to

within a reasonable commuting distance

of the other spouse’s tax home.

line 3.

Otherwise, only one spouse can claim

Yes. Locate the amount under the column Limit on Housing

his or her housing exclusion or deduction.

Expenses (full year) from the table beginning on page 5 for the

This is true even if you and your spouse

location in which you incurred housing expenses. This is your

file separate returns.

limit on housing expenses. Enter the amount here and on

See Pub. 54 for additional information.

line 29b.

Line 29a. Enter the city or other location

(if applicable) and the country where you

STOP

Do not complete the rest of this worksheet . . . . . . . . . . . .

incurred foreign housing expenses during

the tax year only if your location is listed

3. Enter the amount under the column Limit on Housing Expenses

in the table beginning on page 5;

(daily) from the table beginning on page 5 for the location in which

otherwise, leave this line blank.

you incurred housing expenses. If the location is not listed in the

Line 29b. Your housing expenses may

table, enter $76.36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

not exceed a certain limit. The limit on

housing expenses varies depending upon

4. Multiply line 1 by line 3. This is your limit on housing expenses.

the location in which you incur housing

Enter the result here and on line 29b . . . . . . . . . . . . . . . . . . . . .

expenses. In 2011, for most locations,

this limit is $27,870 (30 percent of

-3-

Instructions for Form 2555 (2011)

Instructions For Form 2555 - Foreign Earned Income - Internal Revenue Service - 2011 Page 3

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