Foreign Housing Exclusion (FHE) for Americans Abroad
Foreign Housing Exclusion (FHE) for Americans Abroad For 2026 , the Foreign Housing Exclusion (FHE) allows U.S. taxpayers living abroad to exclude certain housing-related expenses from their taxable income, in addition to the Foreign Earned Income Exclusion (FEIE) . Key Details for 2026 (Projected, Based on Past Trends) Base Housing Amount (Standard Limit): Typically set at 16% of the FEIE maximum . For 2026 , if the FEIE is projected at 120,000** (based on inflation adjustments), the base housing amount would be around ** 19,200 (16% of $120,000). Total Housing Exclusion Limit: The IRS sets a cap on excludable housing expenses, usually 30% of the FEIE (but higher in high-cost cities). For 2026 , this could be around 36,00 * (30% of 120,000). Eligible Expenses: Rent, utilities (except phone/internet), property insurance, parking, and some furnishings. Not eligible: Mortgage principal, home improvements, domestic labor. High-Cost Locations: If you live in an expensive city (e.g...