Publication 54 - Tax Guide For U.s. Citizens And Resident Aliens Abord - 2011 Page 21
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44Second foreign household. Ordinarily, if
In deciding whether to give approval, the IRS
and (if they live with you) for your spouse and
will consider any facts and circumstances that
dependents.
you maintain two foreign households, your rea-
may be relevant. These may include a period of
sonable foreign housing expenses include only
Consider only housing expenses for the part
residence in the United States, a move from one
costs for the household that bears the closer
of the year that you qualify for the foreign earned
foreign country to another foreign country with
relationship (not necessarily geographic) to your
income exclusion.
different tax rates, a substantial change in the
tax home. However, if you maintain a second,
Housing expenses include:
tax laws of the foreign country of residence or
separate household outside the United States
•
physical presence, and a change of employer.
Rent,
for your spouse or dependents because living
conditions near your tax home are dangerous,
•
The fair rental value of housing provided in
unhealthful, or otherwise adverse, include the
kind by your employer,
expenses for the second household in your rea-
Foreign Housing
•
Repairs,
sonable foreign housing expenses. You cannot
Exclusion and
•
include expenses for more than one second
Utilities (other than telephone charges),
foreign household at the same time.
•
Deduction
Real and personal property insurance,
If you maintain two households and you ex-
•
Nondeductible occupancy taxes,
clude the value of one because it is provided by
your employer, you can still include the ex-
In addition to the foreign earned income exclu-
•
Nonrefundable fees for securing a lease-
penses for the second household in figuring a
sion, you also can claim an exclusion or a de-
hold,
foreign housing exclusion or deduction.
duction from gross income for your housing
•
Rental of furniture and accessories, and
amount if your tax home is in a foreign country
Adverse living conditions include:
and you qualify for the exclusions and deduction
•
Residential parking.
•
A state of warfare or civil insurrection in
under either the bona fide residence test or the
the general area of your tax home, and
physical presence test.
Housing expenses do not include:
•
The housing exclusion applies only to
Conditions under which it is not feasible to
•
Expenses that are lavish or extravagant
amounts considered paid for with employer-
provide family housing (for example, if you
under the circumstances,
provided amounts. The housing deduction ap-
must live on a construction site or drilling
plies only to amounts paid for with
•
rig).
Deductible interest and taxes (including
self-employment earnings.
deductible interest and taxes of a ten-
If you are married and you and your spouse
ant-stockholder in a cooperative housing
Foreign Housing Exclusion
each qualifies under one of the tests, see Mar-
corporation),
ried Couples, later.
•
If you do not have self-employment income, all
The cost of buying property, including prin-
cipal payments on a mortgage,
of your earnings are employer-provided
Housing Amount
amounts and your entire housing amount is con-
•
The cost of domestic labor (maids, gar-
sidered paid for with those employer-provided
Your housing amount is the total of your housing
deners, etc.),
amounts. This means that you can exclude (up
expenses for the year minus the base housing
•
Pay television subscriptions,
to the limits) your entire housing amount.
amount.
•
Improvements and other expenses that in-
Employer-provided amounts. These include
Base housing amount. The computation of
crease the value or appreciably prolong
any amounts paid to you or paid or incurred on
the base housing amount (line 32 of Form 2555)
the life of property,
your behalf by your employer that are taxable
is tied to the maximum foreign earned income
•
Purchased furniture or accessories, or
foreign earned income (without regard to the
exclusion. The amount is 16% of the exclusion
•
amount (computed on a daily basis), multiplied
foreign earned income exclusion) to you for the
Depreciation or amortization of property or
by the number of days in your qualifying period
year. Employer-provided amounts include:
improvements.
that fall within your tax year.
•
Your salary,
For 2011, the maximum foreign earned in-
No double benefit. You cannot in-
•
come exclusion is $92,900 per year; 16% of this
Any reimbursement for housing expenses,
!
clude in housing expenses the value of
amount is $14,864, or $40.72 per day. To figure
•
Amounts your employer pays to a third
meals or lodging that you exclude from
CAUTION
your base housing amount if you are a calen-
party on your behalf,
gross income (see
Exclusion of Meals and
dar-year taxpayer, multiply $40.72 by the num-
Lodging, earlier) or that you deduct as moving
•
ber of your qualifying days during 2011. (See
The fair rental value of company-owned
expenses.
Part-year exclusion under Limit on Excludable
housing furnished to you unless that value
Amount, earlier.) Subtract the result from your
is excluded under the rules explained ear-
Limit on housing expenses. The amount
total housing expenses (up to the applicable
lier at
Exclusion of Meals and
Lodging.
of qualified housing expenses eligible for the
limit) to find your housing amount.
housing exclusion and housing deduction is lim-
•
Amounts paid to you by your employer as
ited. The limit is generally 30% of the maximum
part of a tax equalization plan, and
Example. Your qualifying period includes all
foreign earned income exclusion (computed on
•
of 2011. During the year, you spent $16,800 for
Amounts paid to you or a third party by
a daily basis), multiplied by the number of days
your housing. This is below the limit for the
your employer for the education of your
in your qualifying period that fall within your tax
location in which you incurred the expenses.
dependents.
year. For 2011, this is generally $76.36 per day
Your housing amount is $16,800 minus
($27,870 per year). However, the limit will vary
$14,864, or $1,936.
depending upon the location of your foreign tax
Choosing the exclusion. You can choose
home.
the housing exclusion by completing the appro-
U.S. Government allowance. You must re-
A qualified individual incurring housing ex-
priate parts of Form 2555. You cannot use Form
duce your housing amount by any U.S. Govern-
penses in a high-cost locality during 2011 can
2555-EZ to claim the housing exclusion. Other-
ment allowance or similar nontaxable allowance
use housing expenses that total more than the
wise, the rules about choosing the exclusion
intended to compensate you or your spouse for
standard limit on housing expenses ($27,870) to
under Foreign Earned Income Exclusion also
the expenses of housing during the period for
determine the housing amount. An individual
apply to the foreign housing exclusion.
which you claim a foreign housing exclusion or
who does not incur housing expenses in a
deduction.
Your housing exclusion is the lesser of:
high-cost locality is limited to maximum housing
•
That part of your housing amount paid for
expenses of $76.36 per day ($27,870 per year).
Housing expenses. Housing expenses in-
with employer-provided amounts, or
clude your reasonable expenses paid or in-
The limits for high-cost localities are listed in
•
curred for housing in a foreign country for you
the Instructions for Form 2555.
Your foreign earned income.
Chapter 4 Foreign Earned Income and Housing: Exclusion – Deduction
Page 21
ADVERTISEMENT
0 votes
Related Articles
Related forms
Publication 500 - Tax Guide For Wisconsin Political Organizations And Candidates - Department Of Revenue
Financial
Form Dhcs 0001 - California U.s. Citizens And Nationals Applying For Medi-cal Must Show Proof Of Citizenship And Identity (korean) - Health And Human Services Agency
Legal
Related Categories
Parent category: Financial