2007 Foreign Earned Income Exclusion Housing Cost Table Released

When calculating the excess foreign housing costs exclusion using Form 2555, Foreign Earned Income, the housing costs must exceed the base in order for the taxpayer to receive a benefit. This base amount is 16% of the foreign earned income exclusion. This base amount for 2007 is $13,712 (16% x $85,600).

The maximum amount of housing expenses that can be taken into account is 30% of the foreign earned income exclusion. This maximum amount for 2007 is $25,410 ($30% x $85,600).

IRS has the authority to provide a higher maximum amount of foreign housing expenses and has now released the table to be used for 2007 returns. The maximum amounts and applicable locations for 2007 have been released. They have various amounts including $25,800 in Canberra, Australia and $90,900 in Moscow, Russia.

If you have taxpayers who qualify for the excess housing portion of the foreign earned income exclusion, you might want to keep this table handy for the upcoming tax season.

The table can be found in Notice 2007-77. This Notice can be found on IRS’ web site by going to www.irs.gov/pub/ and clicking on irs-drop and then clicking on n-07-77. We can also send you a pdf copy of the Notice attached to an email upon request.

Need help with a Federal tax issue? David & Mary offer a fee based consulting services available over the telephone, email, fax, or mail.

This text has been shared with you courtesy of: David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (fax 920-496-9111) , , , and .

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