Foreign Housing Deduction — Tax Deduction Guide 2026
Deduct qualifying foreign housing expenses above a base amount when living and working abroad.
Eligibility
US citizens living and working abroad
Tax Savings Calculator
Estimated Tax Savings
$1,100
At the 22% tax bracket, a $5,000 deduction saves you $1,100 in taxes.
Savings by Tax Bracket
Requirements
- 1Must qualify for foreign earned income exclusion
- 2Housing costs above base amount
- 3Maximum varies by location
Common Mistakes to Avoid
- !Not qualifying for FEIE
- !Exceeding maximum for location
Required Tax Forms
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Frequently Asked Questions
What is the Foreign Housing Deduction?
Deduct qualifying foreign housing expenses above a base amount when living and working abroad.
Who is eligible for the Foreign Housing Deduction?
US citizens living and working abroad
How much can I save with the Foreign Housing Deduction?
The average tax savings is $15,000 per year. Your actual savings depend on your tax bracket and qualifying amount.
What forms do I need for the Foreign Housing Deduction?
You'll need to file Form 2555 to claim this deduction.
What are common mistakes with the Foreign Housing Deduction?
Common mistakes include: Not qualifying for FEIE; Exceeding maximum for location. Always double-check requirements before filing.
Is the Foreign Housing Deduction worth claiming?
With average savings of $15,000, the foreign housing deduction is highly valuable. Make sure you meet all eligibility requirements.