In reading the IRS
publication about Foreign
Housing Exclusion or Deduction
In the last sentence of the second paragraph it says “The housing deduction applies only to amounts paid for with self-employment
earnings.” and does that mean if my earnings are a salary from a corporation, that the housing expense will be”exclusion” instead of a “deduction”. My understanding deductions
may lower my tax
bracket where exclusion is taking off my income
, but I am taxed at the higher bracket. Or does it mean I have to be self-employed to take advantage of taking my housing expenses off my income?
Also can my wife deduct say the maximum allowed which is around $27,000, and in addition can I, even if we live in the same house but we have at least that much housing expenses together and our employer, who we work for the same one, gives us
each a housing benefit
? I read something about “The spouse claiming the exclusion or deduction can aggregate the housing expenses of both spouses” and I am not sure if that meant we could do this.