Foreign Housing Exclusion And Deduction

AAA

DEFINITION of 'Foreign Housing Exclusion And Deduction'

An allowance for taxpayers who live and work in a foreign country to exclude any amount that their employer allocates to them to cover housing costs. The exclusion applies regardless of whether the expenses are paid directly to the taxpayer or on his or her behalf. This exclusion applies for expenses related to housing, rent, repairs, utilities and several other types of expenses.

INVESTOPEDIA EXPLAINS 'Foreign Housing Exclusion And Deduction'

In order to qualify for this exclusion, taxpayers must meet the same time criteria as for the bona fide resident or physical-presence tests. Qualifying expenses may also include payments intended to equalize taxes and education expenses for the taxpayer's children or dependents. Costs relating to the purchase of property or the employ of domestic servants do not qualify for the exclusion.

RELATED TERMS
  1. Physical-Presence Test

    Similar to the bona fide foreign residence test, the physical-presence ...
  2. Bona Fide Foreign Resident

    Any resident of a foreign country that meets the IRS criteria ...
  3. Deduction

    Any item or expenditure subtracted from gross income to reduce ...
  4. Principal Residence

    The primary location that a person inhabits. It doesn't matter ...
  5. Federal Income Tax

    A tax levied by the United States Internal Revenue Service (IRS) ...
  6. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
RELATED FAQS
  1. I am a non-U.S. citizen living outside the U.S. and trading stocks through a U.S. ...

    The tax implications for a foreign investor will depend on whether that person is classified as a resident alien or a non-resident ... Read Full Answer >>
  2. What does the law say about non-U.S. citizens buying stocks of U.S. companies? Are ...

    The law is very fuzzy on the matter of who may own U.S. securities and for what purpose. The U.S. follows the common law ... Read Full Answer >>
Related Articles
  1. Taxes

    Get A Tax Credit For Your Foreign Investments

    The foreign tax credit provides a break on investment income made and taxed in a foreign country.
  2. Taxes

    How To Use Your IRA As A Last-Minute Tax Deduction

    While some people are stressing over their taxes, there is a big advantage to delaying the process: You can maximize your 2014 contributions to your IRA.
  3. Taxes

    Will Itemized Deductions Get You A Bigger Refund?

    April and taxes are due soon. If you need to file your return, you might have to decide if itemizing your deductions this year will net you a better deal.
  4. Savings

    How Microeconomics Affects Everyday Life

    Microeconomics is the study of how individuals and businesses make decisions to maximize satisfaction. Microeconomic principles can describe many everyday experiences. We use renting a New York ...
  5. Professionals

    Vanguard Readies Muni Bond ETF

    Vanguard is set to roll out a muni bond ETF, the firm's first.
  6. Taxes

    Switzerland's Declining Tax Haven Appeal

    Switzerland's tax haven allure is being threatened by efforts by the US and other governments to make Swiss banks give up their much-vaunted secrecy.
  7. Taxes

    Business Taxes: Not Paying More Than You Have To

    If you're a small business owner, note these potential tax deductibles so that you don't pay taxes that could have been extra revenue in your account.
  8. Taxes

    Are You Missing Out On These Tax Exemptions?

    To lower your tax bill, make sure that you're taking all the exemptions that apply to you.
  9. Taxes

    The Fundamentals of Draghinomics

    European Central Bank President Mario Draghi has introduced a set of reforms aimed at reviving the eurozone economy.
  10. Taxes

    The Fundamentals Of Abenomics

    Abenomics is Japanese Prime Minister Shinzo Abe's aggressive, three-pillared economic policy.

You May Also Like

Hot Definitions
  1. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  2. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  3. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  4. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  5. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
  6. Absorption Costing

    A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption ...
Trading Center