Yes! The Foreign Housing Exclusion allows you to deduct the excess of housing expenses, paid by employer-provided amounts that are over 16% of the FEIE amount of that year. Be aware though, there is a limit to how much foreign housing expenses you can deduct.
Using this housing exclusion can help, especially if you earn more than the maximum FEIE allowed amount. The Foreign Tax Credit can also be a huge help, which is also supported by the MyExpatTaxes tax software.
In addition to rent as a qualified expense for the Foreign Housing Exclusion, the following are also applicable:
- home utilities (think electricity)
- personal property insurance
- accessory rentals
- household repairs
To input it in our software, you’ll see just need to select the “Housing Expenses” section in the navigation panel: