Use the Foreign Housing Exclusion to Deduct Some of Your Housing Costs
View/Add Comments (0 Comments) | Add to Favorites (9 Favorites)
Using the Foreign Housing Exclusion you can deduct the equivalent of foreign rents, utility bills (apart from telephone and cable), furniture rental, repairs, parking and more. There is a ceiling to the amount you can deduct and this ceiling is directly tied to the Foreign Earned Income Exclusion amount each year. For 2013, the maximum you can deduct is $29,280. However, if you live in a city with a higher cost of living, that amount can increase. For example, an expat in Hong Kong is allowed $114,300! The 'floor' for 2013 is $15,616, which is the amount the US determines you would’ve spent on housing had you lived in the US. So you would take your maximum excludable amount and reduce it by the floor to calculate your exclusion amount. This amount is also prorated by the number of days you actually lived abroad so document that carefully in order to accurately calculate your Foreign Housing Exclusion.
Submitted on Jun 09, 2014 - Category: Expat Finance
Submitted By
GreenbackExpatTaxServices
ABOUT ME
David is an IRS Enrolled Agent, an MBA and an experienced finance professional and entrepreneur. David and his wife, Carrie, were frustrated with the process of filing their expat taxes. They found plenty of accountants, but few who could accurately prepare expat taxes. There were expensive accountants who treated them like a number and US CPAs who were well meaning, but not up to date on the rules as they apply to expats. Together they decided there had to be a better way. So they created the kind of company they wanted to work with - and Greenback Expat Tax Services was born!
Comments
