Form 2555 Line 28 using allowed max rather than actual

[JoeSwiss]

I'm trying to finish off the 2006 1040, now looking at Form 2555 line 28 -- qualified housing expenses. I'm supposed to put in my "total reasonable expenses paid or incurred .. for your foreign housing." I live in a high cost housing area -- Zurich Switzerland, but by good luck and willingness to compromise I pay actual housing expenses that are less than the limit given in the IRS 2007 guidance of 38,700. Is there any justification for me just putting in the IRS limit for line 28 of 38,700, instead of my lower actual expenses? ie treat the limit as a de facto "standard deduction"? This would result in the greatest tax refund I could receive than otherwise. I feel frustrated that the government benefits from my own savvy when I pay for housing less than I'm "allowed" to pay according to the allowable limit, and so have to use the lower actual expenses rather than the higher allowed ones on the form 2555. I hope this is clear. Thanks for any help.

Joe Swiss

[Bees Knees]

Line 28 asks for the amount you actually paid for housing. There is no such thing as a standard deduction for housing.

As to not being fair that the government is punishing you for keeping your costs down, the argument is irrelevant and naive. Tax law has nothing to do with being fair. The only fair tax is a flat tax. One rate, zero deductions. When I walk into a store and buy a pair of drum sticks, they don’t ask me how many kids I have, or whether I found cheap housing in Switzerland. I pay 6.5% sales tax, period. That’s fair. Being able to deduct your housing costs because you work in a foreign country is not fair. Stop whining and be glad you can exclude some of your income from taxation. I have to pay tax on all of mine.

[veritas]

lol

Exactly.................

[WhiteOleander]

Line 28 asks for the amount you actually paid for housing. There is no such thing as a standard deduction for housing.

As to not being fair that the government is punishing you for keeping your costs down, the argument is irrelevant and naive. Tax law has nothing to do with being fair. The only fair tax is a flat tax. One rate, zero deductions. When I walk into a store and buy a pair of drum sticks, they don’t ask me how many kids I have, or whether I found cheap housing in Switzerland. I pay 6.5% sales tax, period. That’s fair. Being able to deduct your housing costs because you work in a foreign country is not fair. Stop whining and be glad you can exclude some of your income from taxation. I have to pay tax on all of mine.

Yea, but Radio Shack asks for my phone number!!!! What's next?

[JoeSwiss]

A digression

Bees Knees lifts his leg for a sarcastic pose in a variety of ways, while boasting he pays all his taxes.

"Stop whining and be glad you can exclude some of your income from taxation. I have to pay tax on all of mine."

Actually, I only get to exclude some of my income from double taxation. Switzerland takes first cut on all of it, then comes the US a second time, above the exclusion amount.

So forget the blim blam about fairness.

Fair flat tax? The rich pay out of their superfluity, the poor out of their need. Some progressivity is good.

What fairness is not, is when last minute the Conference Committee in a midnight deal without any opportunity for public comment raises taxes on Americans working overseas. Which is what the May 2006 TIRPA does.

What it's also not, is when the dollar tanks and my doubly-taxed income goes way up when nothing's changed but the exchange rate. Which also means BK is stuck at home in Minnesota cuz he can't afford a trip to Switzerland. Who's really whining behind the Schadenfreude?

Anyway, you're probably right about Line 28.

[joanmcq]

Well at least you get a tax credit or deduction for the amount thats double taxed. And get to live in Switzerland. And have an income above the exclusion amount. As for TIPRA, they raised taxes on folks that aren't big lobbying orgs, like expats and minors. God forbid they raise taxes on hedge fund managers.

Did I mention you get to live in Switzerland?

[veritas]

No such thing as a free ride

Bees Knees lifts his leg for a sarcastic pose in a variety of ways, while boasting he pays all his taxes.

"Stop whining and be glad you can exclude some of your income from taxation. I have to pay tax on all of mine."

Actually, I only get to exclude some of my income from double taxation. Switzerland takes first cut on all of it, then comes the US a second time, above the exclusion amount.

So forget the blim blam about fairness.

Fair flat tax? The rich pay out of their superfluity, the poor out of their need. Some progressivity is good.

What fairness is not, is when last minute the Conference Committee in a midnight deal without any opportunity for public comment raises taxes on Americans working overseas. Which is what the May 2006 TIRPA does.

What it's also not, is when the dollar tanks and my doubly-taxed income goes way up when nothing's changed but the exchange rate. Which also means BK is stuck at home in Minnesota cuz he can't afford a trip to Switzerland. Who's really whining behind the Schadenfreude?

Anyway, you're probably right about Line 28.

He is right.


You see Joe Swiss you get free tax advice from people who make money by doing tax returns. So you pay a little by getting jabbed. It entertains us and you get your free advice. When people pay us cash then you get advice and you get to whine and we smile and say yes sir/madam.