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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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My husband and I both worked in China in 2014 and we both

Customer Question

My husband and I both worked in China in 2014 and we both received housing allowance from our respective companies for our China rent. We file married, joint taxes. Can we claim both his allowance and my allowance as foreign housing exemption at the same time or only one? What can I reference to get the black and white answer to this question.
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Each of you will separately determine if you qualify for the foreign earned income exclusion and foreign housing exclusion.
So - each will prepare separate form 2555 and both these forms will be attached to your jointly filed tax return.
Since the foreign earned income exclusion is voluntary, qualifying individuals must choose to claim the exclusion. The foreign earned income exclusion and the foreign housing cost amount exclusion are claimed and figured using Form 2555, which must be attached to Form 1040
Here is the form
http://www.irs.gov/pub/irs-pdf/f2555.pdf

Expert:  Lev replied 1 year ago.

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($99,200 for 2014 and $100,800 for 2015).
In addition, you can exclude or deduct certain foreign housing amounts. The limitation on housing expenses is generally 30% of the maximum foreign earned income exclusion.
A common misconception that contributes to the international tax gap is that this potentially excludable foreign earned income is exempt income not reportable on a US tax return. In fact, only a qualifying individual with qualifying income may elect to exclude foreign earned income and this exclusion applies only if a tax return is filed and the income is reported.
These exclusions are separately claimed by each spouse.

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