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Old 16.05.2012, 12:10
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US taxes: question about the Foreign Housing Exclusion (form 2555)

Ugh, I've looked at publication 54 as well as the 2555 instructions and can't figure this out...

I am American, married to a Swiss and living in Zürich, so am filing as single (he has no tax liability, so I am treating him as a nonresident alien, which he is, so I'm single for tax purposes). I can claim the foreign earned income exclusion (form 2555) but would also like to claim the housing exclusion.

BUT: though I am on the rental contract and the renter's insurance contract, my husband pays these bills. We do not have joint accounts.

Can I still claim the exclusion even though I do not technically pay the rent?

Oh, and my husband is not my employer.
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Old 16.05.2012, 12:40
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Re: US taxes: question about the Foreign Housing Exclusion (form 2555)

I'm not sure I can answer your question but some things to consider:

- your tax filing status must be the same in Switzerland and in the US. As you cannot file single in CH you must also file joint in the US. My accountant told me this a couple of times when I asked about filing differently.

- I have always taken the income and housing exclusion but have never needed to provide proof with the lease --I have needed to provide copies of all the other bills to do with the household. In order to take the housing exclusion I believe that you must claim that you are only here temporarily --I really don't know about this, but I remember there are some funny rules about it.

- don't forget that you have to claim all assets and accounts to the US. This is to a separate address than the IRS.

I think you already know that you can't take a deduction for something that you don't pay, in the eyes of the law this is fraud. If you ever get audited then you need to provide the proof so if I were in your shoes I would reconsider.
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Old 16.05.2012, 12:58
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Re: US taxes: question about the Foreign Housing Exclusion (form 2555)

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I'm not sure I can answer your question but some things to consider:

- your tax filing status must be the same in Switzerland and in the US. As you cannot file single in CH you must also file joint in the US. My accountant told me this a couple of times when I asked about filing differently.

- I have always taken the income and housing exclusion but have never needed to provide proof with the lease --I have needed to provide copies of all the other bills to do with the household. In order to take the housing exclusion I believe that you must claim that you are only here temporarily --I really don't know about this, but I remember there are some funny rules about it.

- don't forget that you have to claim all assets and accounts to the US. This is to a separate address than the IRS.

I think you already know that you can't take a deduction for something that you don't pay, in the eyes of the law this is fraud. If you ever get audited then you need to provide the proof so if I were in your shoes I would reconsider.
As for the filing status, I was advised by my tax attorney to file as head of household. Certainly since my husband has no tax liability in the US, and is a non-resident alien, I can file as single for the purposes of taxes. I have confirmed this with the IRS directly, so your accountant is mistaken or our circumstances are different.

There is nothing weird about the housing exclusion except you must be employed (not self-employed) and it doesn't work if you're paying a mortgage.

And, yeah, I'm very aware of the FBAR filing requirements.

And finally, your last point is off the mark, since we live together and do pay rent. I'm not claiming rent that isn't paid. After all, I can claim my children as dependents without including my husband as long as he doesn't file and claim them as well. So, is this the same type of thing?

Someone who actually knows, please help!
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Old 16.05.2012, 13:34
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Re: US taxes: question about the Foreign Housing Exclusion (form 2555)

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As for the filing status, I was advised by my tax attorney to file as head of household. Certainly since my husband has no tax liability in the US, and is a non-resident alien, I can file as single for the purposes of taxes. I have confirmed this with the IRS directly, so your accountant is mistaken or our circumstances are different.

There is nothing weird about the housing exclusion except you must be employed (not self-employed) and it doesn't work if you're paying a mortgage.

And, yeah, I'm very aware of the FBAR filing requirements.

And finally, your last point is off the mark, since we live together and do pay rent. I'm not claiming rent that isn't paid. After all, I can claim my children as dependents without including my husband as long as he doesn't file and claim them as well. So, is this the same type of thing?

Someone who actually knows, please help!
easy with the attitude there, I only replied to your question where you explicitly stated that you don't technically pay the rent. It isn't too easy to read minds when there are only few details given.
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Old 16.05.2012, 13:51
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Re: US taxes: question about the Foreign Housing Exclusion (form 2555)

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easy with the attitude there, I only replied to your question where you explicitly stated that you don't technically pay the rent. It isn't too easy to read minds when there are only few details given.
Sorry you took it that way, but it's not attitude-it is just a more nuanced question than you took it for. And if I was trying to defraud the IRS, I wouldn't be stupid enough to ask questions about it.

Example: I can count my nonresident alien husband as a dependent. It doesn't make sense, but that is the rule of the IRS.

So, in the wording of the form 2555 form, " Enter the total reasonable expenses paid or incurred during the tax year by you, or on your behalf, for your foreign housing and the housing of your spouse and dependents if they lived with you."

If my husband is my dependent and he paid the rent, do I claim the deduction? Why include "on your behalf?" Obviously, if it is the employer, you count the value and then add that value to your income. What if it's not your employer?
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Old 16.05.2012, 14:01
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Re: US taxes: question about the Foreign Housing Exclusion (form 2555)

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As for the filing status, I was advised by my tax attorney to file as head of household. Certainly since my husband has no tax liability in the US, and is a non-resident alien, I can file as single for the purposes of taxes. I have confirmed this with the IRS directly, so your accountant is mistaken or our circumstances are different.
Head of household is not the same as single. If you are married, you CANNOT file as single!

If your spouse is not a citizen or resident, and you have children, you can claim head of household, or as married filing separately. I have done both over the years, but you get better deductions with head of household. No children, then married, filing separately.

Tom
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Old 16.05.2012, 14:45
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Re: US taxes: question about the Foreign Housing Exclusion (form 2555)

You can not file as single!

Married Filing Seperate of Head of Household assuming you meet HOH requirements, qualifying dependents etc.

You can not claim housing if you are not paying the housing and your spouse is. This would get picked up in audit, should you get audited as mentioned.

You can elect to treat your spouse as resident, if you want to take the housing, but that means including all his income etc too.
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Old 16.05.2012, 14:57
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Re: US taxes: question about the Foreign Housing Exclusion (form 2555)

Yes, apologies, head of household
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Old 16.05.2012, 15:06
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Re: US taxes: question about the Foreign Housing Exclusion (form 2555)

I don't see why you couldn't claim the housing expenses, as your husband won't be claiming them on his Swiss taxes!

At the very least you can claim half, as you are both on the lease, etc. and therefore jointly responsible.

Tom
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