2023 Foreign housing cost exclusions released

The IRS has issued the 2023 foreign housing cost exclusions. A U.S. citizen or U.S. resident alien living abroad can elect to exclude the foreign earned income and housing cost amount from gross income (with limitations). This exclusion is calculated based on the number of days physically present in the foreign location. In addition, the IRS allows a higher amount for those living in certain high-cost locations. Without adjustment, the applicable limit for 2023 is $36,000. The IRS stated in Notice 2023-26 that qualified taxpayers may elect to apply 2023 limitations to the 2022 taxable year. For more details, click here or contact us today.