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 >>
  3. Do I need to file an income tax return every year?

    Contrary to popular belief, there are indeed situations where a person does not need to file a tax return every year. For ... Read Full Answer >>
  4. How is a savings account taxed?

    In the United States, the Internal Revenue Service considers interest earned in a savings account to be taxable income. Taxpayers ... Read Full Answer >>
  5. What are the differences between absorption costing and variable costing?

    Absorption costing includes all costs, including fixed costs, in figuring the cost of production, while variable costing ... Read Full Answer >>
  6. How can I find out which income tax bracket I am in?

    U.S. federal tax brackets are based on filing status (single, married filing jointly, married filing separately or head of ... 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

    Explaining Progressive Tax

    A progressive tax is a levy in a tax system where the tax rate increases as the taxable base increases.
  3. Economics

    Why Working Doesn't Add Up For Many Women

    A type of tax deduction for Japanese stay-at-home wives puts a barrier on women working full time in the country.
  4. Taxes

    Tea Party Vs. Republican Party: Who Will Win In 2016?

    What agendas define the rift between the Tea Party and the Republican establishment, and which side will win the presidential nomination in 2016?
  5. Home & Auto

    What Are The Tax Advantages Of Buying A Home?

    Don't forget these deductions and credits that homeowners can use to reduce their tax bill.
  6. Taxes

    Corporate Tax Rates: The Highs and the Lows

    The United States is No. 2 in the world for its high corporate tax rate. There are ways around paying it, and many nations with lower rates are worse off.
  7. Taxes

    Understanding Income Tax

    Income tax is a levy many governments place on revenue of entities within their jurisdiction.
  8. Economics

    What's a Regressive Tax?

    A regressive tax is a levy in a tax system where the tax rate does not change based on the level of income.
  9. Entrepreneurship

    What's the Verdict on START-UP NY?

    START-UP NY is an initiative designed to attract companies to New York State by giving them 10 years of tax breaks. Sounds good, but is it a success?
  10. Retirement

    In Your 20s? Reasons To Get A Roth IRA Now

    There are strong reasons to put retirement savings into a Roth IRA now, while time is on your side, your salary hasn't peaked, and the rules favor you.

You May Also Like

Hot Definitions
  1. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  2. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  3. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  4. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
Trading Center