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Tax and Foreign Income, Low-Income Housing Tax


Tax and Foreign Income, Low-Income Housing Tax

Tax and Foreign Income, Low-Income Housing Tax, Military Allowances and Taxable Fringe Benefits, Retirement and Annuity Income and Deductions and Exemptions (IR-2011-9)

WASHINGTON — Starting in tax year 2011, there is a new form for taxpayers to use to claim the Foreign Earned Income Exclusion.

Taxpayers will report their housing cost amount on Line 25 of Form 2555.

In addition, the following tax forms will be updated for 2011: Form 2555 to add a new Line 27, Schedule A to add a new line 4d to deduct expenses not reimbursed by an employer. So that are allocable to the production of income (such as unreimbursed employee home office expenses), and

Schedule R to add a new line 3 that allows taxpayers to choose whether or not the standard deduction will be claimed.

The IRS today issued some of the forms for filing 2011 returns.

The tax agency expects to release additional forms between now and when taxpayers first use them on their 2011 returns. Which they file in 2012. The IRS also will release some forms for 2012 before the end of this year.

In addition, the IRS is revising the 2011 version of Publication 17, Your Federal Income Tax. Which describes information returns taxpayers will receive from employers and financial institutions.

New Foreign Earned Income Form Needed

Taxpayers who claim the foreign earned income exclusion must file a new form for tax year 2011.

Taxpayers can choose to claim either the foreign earned income exclusion or the foreign housing exclusion or deduction under either test. The amount of time spent in a foreign country is only one factor in determining. Whether an individual meets the physical presence test.

The new form, Form 2555, Foreign Earned Income , will help determine the amount of foreign earned income excluded under either test.

IRS officials said taxpayers will report their housing cost amount on Line 25.

Under the foreign earned income exclusion, this housing cost amount cannot be more than the maximum foreign earned income exclusion for that year $95,100 in 2012 and $97,600 in 2011.

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