Instructions for IRS Form 2555 - Foreign Earned Income 2017

January 1, 2013 "Instructions For Irs Form 2555 - Foreign Earned Income" contain the latest filing requirements for the IRS-issued Form 2555. Download your copy of the instructions by clicking the link below.

IRS Form 2555 is tax form released and collected by the Internal Revenue Service of the United States.

ADVERTISEMENT
2017
Department of the Treasury
Internal Revenue Service
Instructions for Form 2555
Foreign Earned Income
Section references are to the Internal Revenue
airspace above them. It also includes the
during your off periods. You are
Code unless otherwise noted.
seabed and subsoil of those submarine
considered to have an abode in the United
areas adjacent to the country's territorial
States and don't meet the tax home test.
Future Developments
waters over which it has exclusive rights
You can't claim either of the exclusions or
under international law to explore and
the housing deduction.
For the latest information about
exploit the natural resources.
developments related to Form 2555 and
Travel to Cuba
its instructions, such as legislation
The term “foreign country” doesn't
Generally, if you were in Cuba in violation
enacted after they were published, go to
include U.S. possessions or territories. It
of U.S. travel restrictions, the following
www.IRS.gov/Form2555.
doesn't include the Antarctic region.
rules apply.
What's New
Any time spent in Cuba can't be
Who Qualifies
counted in determining if you qualify under
You qualify for the tax benefits available to
Exclusion amount. For 2017, the
the bona fide residence or physical
taxpayers who have foreign earned
maximum exclusion has increased to
presence test.
income if both of the following apply.
$102,100.
Any income earned in Cuba isn't
You meet the tax home test (discussed
considered foreign earned income.
General Instructions
later).
Any housing expenses in Cuba (or
You meet either the bona fide residence
housing expenses for your spouse or
test or the physical presence test,
Don't include on Form 1040,
dependents in another country while you
discussed later.
line 64 (federal income tax
!
were in Cuba) aren't considered qualified
withheld), any taxes an employer
housing expenses.
Note. Income from working abroad as an
CAUTION
withheld from your pay and paid to the
employee of the U.S. Government does
foreign country's tax authority instead of to
Note. If you performed services at the
not qualify for either of the exclusions or
the U.S. Treasury.
U.S. Naval Base at Guantanamo Bay, you
the housing deduction. Don't file Form
were not in violation of U.S. travel
2555.
restrictions.
Purpose of Form
Tax home test. To meet this test, your
Waiver of Time Requirements
If you qualify, you can use Form 2555 to
tax home must be in a foreign country, or
figure your foreign earned income
countries (see
Foreign
country, earlier),
If your tax home was in a foreign country
exclusion and your housing exclusion or
throughout your period of bona fide
and you were a bona fide resident of, or
deduction. You cannot exclude or deduct
residence or physical presence,
physically present in, a foreign country
more than your foreign earned income for
whichever applies. For this purpose, your
and had to leave because of war, civil
the year.
period of physical presence is the 330 full
unrest, or similar adverse conditions, the
days during which you were present in a
minimum time requirements specified
You may be able to use Form 2555-EZ
foreign country, not the 12 consecutive
under the bona fide residence and
if you didn't have any self-employment
months during which those days occurred.
physical presence tests may be waived.
income for the year, your total foreign
You must be able to show that you
Your tax home is your regular or
earned income did not exceed $102,100,
reasonably could have expected to meet
principal place of business, employment,
you don't have any business or moving
the minimum time requirements if you
or post of duty, regardless of where you
expenses, and you don't claim the housing
hadn't been required to leave. Each year
maintain your family residence. If you don't
exclusion or deduction. For more details,
the IRS will publish in the Internal
have a regular or principal place of
see Form 2555-EZ and its separate
Revenue Bulletin a list of the only
business because of the nature of your
instructions.
countries that qualify for the waiver for the
trade or business, your tax home is your
previous year and the dates they qualify. If
regular place of abode (the place where
General Information
you left one of the countries during the
you regularly live).
period indicated, you can claim the tax
If you are a U.S. citizen or a U.S. resident
You aren't considered to have a tax
benefits on Form 2555, but only for the
alien living in a foreign country, you are
home in a foreign country for any period
number of days you were a bona fide
subject to the same U.S. income tax laws
during which your abode is in the United
resident of, or physically present in, the
that apply to citizens and resident aliens
States. However, if you are temporarily
foreign country.
living in the United States.
present in the United States, or you
maintain a dwelling in the United States
Note. Specific rules apply to determine if
If you can claim either of the exclusions
(whether or not that dwelling is used by
you are a resident or nonresident alien of
or the housing deduction because of the
your spouse and dependents), it doesn't
the United States. See Pub. 519.
waiver of time requirements, attach a
necessarily mean that your abode is in the
statement to your return explaining that
Foreign country. A foreign country is
United States during that time.
you expected to meet the applicable time
any territory under the sovereignty of a
requirement, but the conditions in the
government other than that of the United
Example. You are employed on an
foreign country prevented you from the
States.
offshore oil rig in the territorial waters of a
normal conduct of business. Also, enter
foreign country and work a 28-day on/
The term “foreign country” includes the
“Claiming Waiver” in the top margin on
28-day off schedule. You return to your
country's territorial waters and airspace,
page 1 of Form 2555.
family residence in the United States
but not international waters and the
Oct 25, 2017
Cat. No. 11901A
2017
Department of the Treasury
Internal Revenue Service
Instructions for Form 2555
Foreign Earned Income
Section references are to the Internal Revenue
airspace above them. It also includes the
during your off periods. You are
Code unless otherwise noted.
seabed and subsoil of those submarine
considered to have an abode in the United
areas adjacent to the country's territorial
States and don't meet the tax home test.
Future Developments
waters over which it has exclusive rights
You can't claim either of the exclusions or
under international law to explore and
the housing deduction.
For the latest information about
exploit the natural resources.
developments related to Form 2555 and
Travel to Cuba
its instructions, such as legislation
The term “foreign country” doesn't
Generally, if you were in Cuba in violation
enacted after they were published, go to
include U.S. possessions or territories. It
of U.S. travel restrictions, the following
www.IRS.gov/Form2555.
doesn't include the Antarctic region.
rules apply.
What's New
Any time spent in Cuba can't be
Who Qualifies
counted in determining if you qualify under
You qualify for the tax benefits available to
Exclusion amount. For 2017, the
the bona fide residence or physical
taxpayers who have foreign earned
maximum exclusion has increased to
presence test.
income if both of the following apply.
$102,100.
Any income earned in Cuba isn't
You meet the tax home test (discussed
considered foreign earned income.
General Instructions
later).
Any housing expenses in Cuba (or
You meet either the bona fide residence
housing expenses for your spouse or
test or the physical presence test,
Don't include on Form 1040,
dependents in another country while you
discussed later.
line 64 (federal income tax
!
were in Cuba) aren't considered qualified
withheld), any taxes an employer
housing expenses.
Note. Income from working abroad as an
CAUTION
withheld from your pay and paid to the
employee of the U.S. Government does
foreign country's tax authority instead of to
Note. If you performed services at the
not qualify for either of the exclusions or
the U.S. Treasury.
U.S. Naval Base at Guantanamo Bay, you
the housing deduction. Don't file Form
were not in violation of U.S. travel
2555.
restrictions.
Purpose of Form
Tax home test. To meet this test, your
Waiver of Time Requirements
If you qualify, you can use Form 2555 to
tax home must be in a foreign country, or
figure your foreign earned income
countries (see
Foreign
country, earlier),
If your tax home was in a foreign country
exclusion and your housing exclusion or
throughout your period of bona fide
and you were a bona fide resident of, or
deduction. You cannot exclude or deduct
residence or physical presence,
physically present in, a foreign country
more than your foreign earned income for
whichever applies. For this purpose, your
and had to leave because of war, civil
the year.
period of physical presence is the 330 full
unrest, or similar adverse conditions, the
days during which you were present in a
minimum time requirements specified
You may be able to use Form 2555-EZ
foreign country, not the 12 consecutive
under the bona fide residence and
if you didn't have any self-employment
months during which those days occurred.
physical presence tests may be waived.
income for the year, your total foreign
You must be able to show that you
Your tax home is your regular or
earned income did not exceed $102,100,
reasonably could have expected to meet
principal place of business, employment,
you don't have any business or moving
the minimum time requirements if you
or post of duty, regardless of where you
expenses, and you don't claim the housing
hadn't been required to leave. Each year
maintain your family residence. If you don't
exclusion or deduction. For more details,
the IRS will publish in the Internal
have a regular or principal place of
see Form 2555-EZ and its separate
Revenue Bulletin a list of the only
business because of the nature of your
instructions.
countries that qualify for the waiver for the
trade or business, your tax home is your
previous year and the dates they qualify. If
regular place of abode (the place where
General Information
you left one of the countries during the
you regularly live).
period indicated, you can claim the tax
If you are a U.S. citizen or a U.S. resident
You aren't considered to have a tax
benefits on Form 2555, but only for the
alien living in a foreign country, you are
home in a foreign country for any period
number of days you were a bona fide
subject to the same U.S. income tax laws
during which your abode is in the United
resident of, or physically present in, the
that apply to citizens and resident aliens
States. However, if you are temporarily
foreign country.
living in the United States.
present in the United States, or you
maintain a dwelling in the United States
Note. Specific rules apply to determine if
If you can claim either of the exclusions
(whether or not that dwelling is used by
you are a resident or nonresident alien of
or the housing deduction because of the
your spouse and dependents), it doesn't
the United States. See Pub. 519.
waiver of time requirements, attach a
necessarily mean that your abode is in the
statement to your return explaining that
Foreign country. A foreign country is
United States during that time.
you expected to meet the applicable time
any territory under the sovereignty of a
requirement, but the conditions in the
government other than that of the United
Example. You are employed on an
foreign country prevented you from the
States.
offshore oil rig in the territorial waters of a
normal conduct of business. Also, enter
foreign country and work a 28-day on/
The term “foreign country” includes the
“Claiming Waiver” in the top margin on
28-day off schedule. You return to your
country's territorial waters and airspace,
page 1 of Form 2555.
family residence in the United States
but not international waters and the
Oct 25, 2017
Cat. No. 11901A
Additional Information
mail your Form 1040 to the addresses
Worksheet to figure the amount of tax to
associated with your state of residence if
enter on Form 1040, line 44. When
Pub. 54 has more information about the
Form 2555 or Form 2555-EZ is attached.
figuring your alternative minimum tax on
bona fide residence test, the physical
See the Instructions for Form 1040. The
Form 6251, you must use the Foreign
presence test, the foreign earned income
filing addresses are also available at
Earned Income Tax Worksheet in the
exclusion, and the housing exclusion and
IRS.gov/filing/international-where-to-file-
instructions for Form 6251.
deduction. You can download this
form-1040-1040a-and-1040ez-addresses-
publication (as well as other forms and
Specific Instructions
for-taxpayers-and-tax-professionals.
publications) at IRS.gov. You can also get
this publication by writing to: National
Choosing the Exclusion(s)
Distribution Center, 1201 N. Mitsubishi
Part I
To choose either of the exclusions,
Motorway, Bloomington, IL 61705-6613.
complete the appropriate parts of Form
Line 1. Enter entire address including city
When To File
2555 and file it with your Form 1040 or
or town, state or province, country, and
Form 1040X. Your initial choice to claim
ZIP or foreign postal code. If using a
A 2017 calendar year Form 1040 is
the exclusion must usually be made on a
military or diplomatic address, include the
generally due April 17, 2018.
timely filed return (including extensions) or
country in which you are living or
on a return amending a timely filed return.
stationed.
However, you are automatically
However, there are exceptions. See Pub.
granted a 2-month extension of time to file
Line 9. Enter your tax home(s) and
54 for details.
(to June 15, 2018, for a 2017 calendar
date(s) established. See
Tax home test
year return) if, on the due date of your
under Who Qualifies, earlier.
Once you choose to claim an
return, you live outside the United States
exclusion, that choice remains in effect for
and Puerto Rico and your tax home
Part II
that year and all future years unless it is
(defined earlier) is outside the United
revoked. To revoke your choice, you must
States and Puerto Rico. If you take this
Bona Fide Residence Test
attach a statement to your return for the
extension, you must attach a statement to
To meet this test, you must be one of the
first year you don't wish to claim the
your return explaining that you meet these
following.
exclusion(s). If you revoke your choice,
two conditions.
A U.S. citizen who is a bona fide
you can't claim the exclusion(s) for your
resident of a foreign country, or countries,
next 5 tax years without the approval of
The automatic 2-month extension also
for an uninterrupted period that includes
the Internal Revenue Service. See Pub. 54
applies to paying the tax. However, you
an entire tax year (January 1–December
for more information.
will owe interest on any tax not paid by the
31, if you file a calendar year return), or
regular due date of your return.
Additional child tax credit. You can't
A U.S. resident alien who is a citizen or
take the additional child tax credit if you
When to claim the exclusion(s). The
national of a country with which the United
claim either of the exclusions or the
first year you plan to take the foreign
States has an income tax treaty in effect
housing deduction.
earned income exclusion and/or the
and who is a bona fide resident of a
housing exclusion or deduction, you may
foreign country, or countries, for an
Earned income credit. You can't take
not yet have met either the physical
uninterrupted period that includes an
the earned income credit if you claim
presence test or the bona fide residence
entire tax year (January 1–December 31, if
either of the exclusions or the housing
test by the due date of your return
you file a calendar year return). See
deduction.
(including the automatic 2-month
Table 3 at
IRS.gov/individuals/
Foreign tax credit or deduction. You
extension, discussed earlier). If this
international-taxpayers/tax-treaty-tables
can't take a credit or deduction for foreign
occurs, you can either:
for a list of countries with which the United
income taxes paid or accrued on income
States has an income tax treaty in effect.
1. Apply for a special extension to a
that is excluded under either of the
date after you expect to qualify, or
exclusions. If all of your foreign earned
Whether you are a bona fide resident of
2. File your return timely without
income is excluded, you can't claim a
a foreign country depends on your
claiming the exclusion and then file an
credit or deduction for the foreign taxes
intention about the length and nature of
amended return after you qualify.
paid or accrued on that income. If only part
your stay. Evidence of your intention may
of your income is excluded, you can't
be your words and acts. If these conflict,
Special extension of time. To apply
claim a credit or deduction for the foreign
your acts carry more weight than your
for this extension, complete and file Form
taxes allocable to the excluded income.
words. Generally, if you go to a foreign
2350 with the Department of the Treasury,
See Pub. 514 for details on how to figure
country for a definite, temporary purpose
Internal Revenue Service Center, Austin,
the amount allocable to the excluded
and return to the United States after you
TX 73301-0045, before the due date of
income.
accomplish it, you aren't a bona fide
your return. Interest is charged on the tax
resident of the foreign country. If
not paid by the regular due date as
IRA deduction. If you claim either of the
accomplishing the purpose requires an
explained earlier.
exclusions, special rules apply in figuring
extended, indefinite stay, and you make
the amount of your IRA deduction. For
Amended return. File Form 1040X to
your home in the foreign country, you may
details, see Pub. 590.
change a return you already filed.
be a bona fide resident. See Pub. 54 for
Generally, Form 1040X must be filed
Figuring Tax on Income
more information and examples.
within 3 years after the date the original
Not Excluded
Line 10. Enter the dates your bona fide
return was filed or within 2 years after the
residence began and ended. If you are still
date the tax was paid, whichever is later.
If you claim either of the exclusions or the
a bona fide resident, enter “Continues” in
housing deduction, you must figure the tax
Where To File
the space for the date your bona fide
on your nonexcluded income using the tax
residence ended.
rates that would have applied had you not
Attach Form 2555 to Form 1040 when
claimed the exclusions. See the
Lines 12a and 12b. If you check “Yes”
filed. Mail your Form 1040 to one of the
Instructions for Form 1040 and complete
on line 12a, enter the type(s) of family
special addresses designated for those
the Foreign Earned Income Tax
member(s) and the date(s) they lived with
filing Form 2555 or Form 2555-EZ. Do not
Instructions for Form 2555 (2017)
-2-
you on line 12b. Acceptable entries for
earned it. (For example, include wages on
been excludable if you had received it in
family members on line 12b include child,
Form 1040, line 7.)
2016.
foster child, grandchild, parent,
If you are excluding income under this
Income is earned in the tax year you
grandparent, brother, sister, aunt, uncle,
rule, do not include this income in Part IV.
perform the services for which you receive
nephew, niece, son, daughter, spouse, or
Instead, attach a statement to Form 2555
the pay. But if you are a cash basis
other. If you check “No” on line 12a, leave
showing how you figured the exclusion.
taxpayer and, because of your employer's
line 12b blank or enter “None.”
Enter the amount that would have been
payroll periods, you received your last
excludable in 2016 on Form 2555 to the
Lines 13a and 13b. If you submitted a
salary payment for 2016 in 2017, that
left of line 45. Next to the amount enter
statement of nonresidence to the
income may be treated as earned in 2017.
“Exclusion of Income Earned in 2016.”
authorities of a foreign country in which
If you cannot treat that salary payment as
Include it in the total reported on line 45.
you earned income and the authorities
income earned in 2017, the rules
hold that you aren't subject to their income
explained under
Income earned in prior
Note. If you claimed any deduction,
tax laws by reason of nonresidency in the
year, discussed later, apply. See Pub. 54
credit, or exclusion on your 2016 return
foreign country, you aren't considered a
for more details.
that is definitely related to the 2016 foreign
bona fide resident of that country.
earned income you are excluding under
Foreign earned income for this purpose
If you submitted such a statement and
this rule, you may have to amend your
means wages, salaries, professional fees,
the authorities haven't made an adverse
2016 income tax return to adjust the
and other compensation received for
determination of your nonresident status,
amount you claimed. To do this, file Form
personal services you performed in a
you aren't considered a bona fide resident
1040X.
foreign country during the period for which
of that country.
Line 20. If you engaged in an
you meet the tax home test and either the
unincorporated trade or business in which
bona fide residence test or the physical
Part III
both personal services and capital were
presence test. It also includes noncash
material income-producing factors, a
Physical Presence Test
income (such as a home or car) and
reasonable amount of compensation for
allowances or reimbursements.
To meet this test, you must be a U.S.
your personal services will be considered
citizen or resident alien who is physically
Foreign earned income doesn't include
earned income. The amount treated as
present in a foreign country, or countries,
amounts that are actually a distribution of
earned income, however, can't be more
for at least 330 full days during any period
corporate earnings or profits rather than a
than 30% of your share of the net profits
of 12 months in a row. A full day means
reasonable allowance as compensation
from the trade or business after
the 24-hour period that starts at midnight.
for your personal services. It also doesn't
subtracting the deduction for the
include the following types of income.
employer-equivalent portion of
To figure 330 full days, add all separate
Pension and annuity income (including
self-employment tax.
periods you were present in a foreign
social security benefits and railroad
country during the 12-month period shown
If capital is not an income-producing
retirement benefits treated as social
on line 16. The 330 full days can be
factor and personal services produced the
security).
interrupted by periods when you are
business income, the 30% rule does not
Interest, ordinary dividends, capital
traveling over international waters or are
apply. Your entire gross income is earned
gains, alimony, etc.
otherwise not in a foreign country. See
income.
Portion of 2016 moving expense
Pub. 54 for more information and
Line 23. List other foreign earned
deduction allocable to 2017 that is
examples.
income not included on lines 19-22. You
included in your 2017 gross income. For
Note. A nonresident alien who, with a
can write “Various” on the dotted lines to
details, see Moving Expense Attributable
U.S. citizen or U.S. resident alien spouse,
the left of the entry space if you have other
to Foreign Earnings in 2 Years under
chooses to be taxed as a resident of the
foreign earned income from multiple
Moving Expenses in Pub. 54.
United States can qualify under this test if
sources.
Amounts paid to you by the U.S.
the time requirements are met. See Pub.
Government or any of its agencies if you
Line 25. Enter the value of meals and/or
54 for details on how to make this choice.
were an employee of the U.S.
lodging provided by, or on behalf of, your
Government or any of its agencies.
Line 16. The 12-month period on which
employer that is excludable from your
Amounts received after the end of the
the physical presence test is based must
income under section 119. To be
tax year following the tax year in which you
include 365 days, part of which must be in
excludable, the meals and lodging must
performed the services.
2017. The dates may begin or end in a
have been provided for your employer's
Amounts you must include in gross
calendar year other than 2017.
convenience and on your employer's
income because of your employer's
business premises. In addition, you must
You must enter dates in both
contributions to a nonexempt employees'
have been required to accept the lodging
spaces provided on line 16. Don't
trust or to a nonqualified annuity contract.
TIP
as a condition of your employment. If you
enter “Continues” in the space for
lived in a camp provided by, or on behalf
Income received in prior year. Foreign
the ending date.
of, your employer, the camp may be
earned income received in 2016 for
considered part of your employer's
services you performed in 2017 can be
Part IV
business premises. See Exclusion of
excluded from your 2016 gross income if,
Meals and Lodging in Pub. 54 for details.
and to the extent, the income would have
Foreign Earned Income
been excludable if you had received it in
Part VI
Enter in this part the total foreign earned
2017. To claim the additional exclusion,
you must amend your 2016 tax return. To
income you earned and received
Line 28. Enter the total reasonable
(including income constructively received)
do this, file Form 1040X.
expenses paid or incurred during the tax
during the tax year. If you are a cash basis
Income earned in prior year. Foreign
year by you, or on your behalf, for your
taxpayer, include in income on Form 1040,
earned income received in 2017 for
foreign housing and the housing of your
the foreign earned income you received
services you performed in 2016 can be
spouse and dependents if they lived with
during the tax year regardless of when you
excluded from your 2017 gross income if,
you. You can also include the reasonable
and to the extent, the income would have
Instructions for Form 2555 (2017)
-3-
Separate foreign households. If you
Limit on Housing Expenses
and your spouse lived in separate foreign
Keep for Your Records
Worksheet—Line 29b
households, you each can claim qualified
expenses for your own household only if:
Note. If the location in which you incurred housing expenses isn't listed in the table at the
Your tax homes weren't within a
end of the instructions, and the number of days in your qualifying period that fall within the
reasonable commuting distance of each
2017 tax year is 365, DO NOT complete this worksheet. Instead, enter $30,630 on line 29b.
other, and
Each spouse's household wasn't within
1. Enter the number of days in your qualifying period that fall within
a reasonable commuting distance of the
the 2017 tax year (see the instructions for line 31) . . . . . . . . . . . .
1.
other spouse's tax home.
Otherwise, only one spouse can claim
2. Did you enter 365 on line 1?
his or her housing exclusion or deduction.
No. If the amount on line 1 is less than 365, skip line 2 and go
This is true even if you and your spouse
file separate returns.
to line 3.
See Pub. 54 for additional information.
Yes. Locate the amount under the column Limit on Housing
Line 29a. Enter the city or other location
Expenses (full year) from the table at the end of the instructions
(if applicable) and the country where you
for the location in which you incurred housing expenses. This is
incurred foreign housing expenses during
your limit on housing expenses. Enter the amount here and
the tax year only if your location is listed in
on line 29b. Also, see Election to apply higher limit on housing
the table at the end of the instructions;
expenses, later.
otherwise, leave this line blank.
STOP
Line 29b. Your housing expenses may
Do not complete the rest of this worksheet . . . . . . . . . .
2.
not exceed a certain limit. The limit on
3. Enter the amount under the column Limit on Housing Expenses
housing expenses varies depending upon
(daily) from the table at the end of the instructions for the location
the location in which you incur housing
in which you incurred housing expenses. If the location isn't listed
expenses. In 2017, for most locations, this
in the table, enter $83.92. Also, see Election to apply higher limit
limit is $30,630 (30 percent of $102,100) if
on housing expenses, later. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.
your qualifying period includes all of 2017
(or $83.92 per day if the number of days in
4. Multiply line 1 by line 3. This is your limit on housing expenses.
your qualifying period that fall within your
Enter the result here and on line 29b . . . . . . . . . . . . . . . . . . . . . .
4.
2017 tax year is less than 365).
The table at the end of the instructions
lists the housing expense limits based on
expenses of a second foreign household
Second foreign household. If you
geographic differences in foreign housing
(defined later). Housing expenses are
maintained a separate foreign household
costs relative to housing costs in the
considered reasonable to the extent they
for your spouse and dependents at a
United States. If the location in which you
aren't lavish or extravagant under the
place other than your tax home because
incurred housing expenses is listed in the
circumstances.
the living conditions at your tax home were
table, or the number of days in your
Housing expenses include rent, utilities
dangerous, unhealthful, or otherwise
qualifying period that fall within the 2017
(other than telephone charges), real and
adverse, you can include the expenses of
tax year is less than 365, use the
Limit on
personal property insurance,
the second household on line 28.
Housing Expenses
Worksheet, on this
nonrefundable fees paid to obtain a lease,
page, to figure the amount to enter on
Married couples. The following rules
rental of furniture and accessories,
line 29b. If the location in which you
apply if both you and your spouse qualify
residential parking, and household
incurred housing expenses is not listed in
for the tax benefits of Form 2555.
repairs. You can also include the fair rental
the table, and the number of days in your
value of housing provided by, or on behalf
Same foreign household. If you and
qualifying period is 365, enter $30,630 on
of, your employer if you haven't excluded it
your spouse lived in the same foreign
line 29b.
on line 25.
household and file a joint return, you must
Example. For 2017, because your
figure your housing amounts (line 33)
Don't include deductible interest and
location is not listed in the table at the end
jointly. If you file separate returns, only
taxes, any amount deductible by a
of the instructions, your limit on housing
one spouse can claim the housing
tenant-stockholder in connection with
expenses is $83.92 per day. If you file a
exclusion or deduction.
cooperative housing, the cost of buying or
calendar year return and your qualifying
improving a house, principal payments on
In figuring your housing amount jointly,
period is January 1, 2017, to October 3,
a mortgage, or depreciation on the house.
either spouse (but not both) can claim the
2017 (276 days), you would enter $23,162
Also, don't include the cost of domestic
housing exclusion or housing deduction.
on line 29b ($83.92 multiplied by 276
labor, pay television, or the cost of buying
However, if you and your spouse have
days).
furniture or accessories.
different periods of residence or presence,
and the one with the shorter period of
Election to apply higher limit on
Include expenses for housing only
residence or presence claims the
housing expenses. For 2016 you could
during periods for which:
elect to apply the 2017 limits on housing
exclusion or deduction, you can claim as
The value of your housing isn't
expenses as discussed in section 4 of
housing expenses only the expenses for
excluded from gross income under section
Notice 2017-21 available at
IRS.gov/irb/
that shorter period. The spouse claiming
119 (unless you maintained a second
the exclusion or deduction can aggregate
2017-13_IRB/ar05.html.
foreign household as defined later), and
the housing expenses of both spouses,
You meet the tax home test and either
The IRS and Treasury Department
subject to the limit on housing expenses
the bona fide residence or physical
anticipate that you will also be allowed to
(line 29b), and subtract his or her base
presence test.
make an election to apply the 2018 limits
housing amount.
to figure your 2017 limit on housing
Instructions for Form 2555 (2017)
-4-
figure the amount of the exclusion
Housing Deduction Carryover
separately for each of you. You each must
Keep for Your Records
Worksheet—Line 49
complete Part VII of your separate Forms
2555.
1. Enter the amount from your 2016 Form 2555, line 46 . . . . . . . . .
1.
Community income. The amount of the
exclusion is not affected by the
2. Enter the amount from your 2016 Form 2555, line 48 . . . . . . . . .
2.
income-splitting provisions of community
3. Subtract line 2 from line 1. If the result is zero, stop; enter -0- on
property laws. The sum of the amounts
line 49 of your 2017 Form 2555. You do not have any housing
figured separately for each of you is the
deduction carryover from 2016 . . . . . . . . . . . . . . . . . . . . . . . . . .
3.
total amount excluded on a joint return.
4. Enter the amount from your 2017 Form 2555, line 47 . . . . . . . . .
4.
Part VIII
5. Enter the amount from your 2017 Form 2555, line 48 . . . . . . . . .
If you claim either of the exclusions, you
5.
can't claim any deduction (including
6. Subtract line 5 from line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
moving expenses), credit, or exclusion
that is definitely related to the excluded
7. Enter the smaller of line 3 or line 6 here and on line 49 of your
income. If only part of your foreign earned
2017 Form 2555. If line 3 is more than line 6, you cannot carry
income is excluded, you must prorate
the difference over to any future tax year
. . . . . . . . . . . . . . . . . .
7.
such items based on the ratio that your
excludable earned income bears to your
total foreign earned income. See Pub. 54
expenses. The authorization to make the
for details on how to figure the amount
Nontaxable U.S. government allowan-
election will be provided in a future annual
allocable to the excluded income.
ces. If you or your spouse received a
notice published in the Internal Revenue
nontaxable housing allowance as a
The exclusion under section 119 and
Bulletin.
military or civilian employee of the U.S.
the housing deduction are not considered
government, see Pub. 54 for information
More than one foreign location. If
definitely related to the excluded income.
on how that allowance may affect your
you moved during the 2017 tax year and
Line 44. Report in full on Form 1040 and
housing exclusion or deduction.
incurred housing expenses in more than
related forms and schedules all
one foreign location as a result, complete
Line 34. Enter any amount your employer
deductions allowed in figuring your
the
Limit on Housing Expenses
paid or incurred on your behalf that is
adjusted gross income (Form 1040,
Worksheet, earlier, for each location in
foreign earned income included in your
line 37). Enter on line 44 the total amount
which you incurred housing expenses,
gross income for the tax year (without
of those deductions (such as the
entering the number of qualifying days
regard to section 911).
deduction for moving expenses, the
during which you lived in the applicable
Examples of employer-provided
deductible part of self-employment tax,
location on line 1. Add the results shown
amounts are:
and the expenses claimed on Schedule C
on line 4 of each worksheet, and enter the
Wages and salaries received from your
or C-EZ (Form 1040)) that aren't allowed
total on line 29b.
employer.
because they are allocable to the
If you moved during the 2017 tax
The fair market value of compensation
excluded income. This applies only to
year and are completing more
provided in kind (such as the fair rental
!
deductions definitely related to the
than one Limit on Housing
value of lodging provided by your
excluded earned income. See Pub. 54 for
CAUTION
Expenses Worksheet, the total number of
employer as long as it isn't excluded on
details on how to report your itemized
days entered on line 1 of your worksheets
line 25).
deductions (such as unreimbursed
may not exceed the total number of days
Rent paid by your employer directly to
employee business expenses) that are
in your qualifying period that fall within the
your landlord.
allocable to the excluded income.
2017 tax year (that is, the number of days
Amounts paid by your employer to
Part IX
entered on Form 2555, line 31).
reimburse you for housing expenses,
educational expenses of your dependents,
If line 33 is more than line 36 and line 27 is
Line 31. Enter the number of days in your
or as part of a tax equalization plan.
more than line 43, complete this part to
qualifying period that fall within your 2017
Self-employed individuals. If all of your
figure your housing deduction.
tax year. Your qualifying period is the
foreign earned income (Part IV) is
period during which you meet the tax
Line 49. Use the housing deduction
self-employment income, skip lines 34 and
home test and either the bona fide
carryover worksheet on this page to figure
35 and enter -0- on line 36. If you qualify
residence or the physical presence test.
your carryover from 2016.
for the housing deduction, be sure to
complete Part IX.
Example. You establish a tax home
One-year carryover. If the amount on
and bona fide residence in a foreign
line 46 is more than the amount on line 47,
Part VII
country on August 14, 2017. You maintain
you can carry the difference over to your
the tax home and residence until January
2018 tax year. If you cannot deduct the
Married couples. If both you and your
31, 2019. You are a calendar year
excess in 2018 because of the 2018 limit,
spouse qualify for, and choose to claim,
taxpayer. The number of days in your
you cannot carry it over to any future tax
the foreign earned income exclusion,
qualifying period that fall within your 2017
year.
tax year is 140 (August 14 through
December 31, 2017).
Instructions for Form 2555 (2017)
-5-

Download Instructions for IRS Form 2555 - Foreign Earned Income 2017

663 times
Rate
4.6(4.6 / 5) 46 votes
ADVERTISEMENT