How to Report Fringe Benefits and Reimbursements on Form 2555 for Foreign Earned Income Exclusion?

The Foreign Earned Income Exclusion can definitely get complicated when you have reimbursements and fringe benefits! Based on your situation, here's how you should approach it: First, you do qualify for the FEIE since you meet the physical presence test (297 days outside the US in a 12-month period). For your specific questions about Form 2555: Your lodging reimbursements should go on Line 28 as part of your housing expenses, not Line 21a. The full $53,000 is correct for Line 28. For the per diem meals, you're right that the tax treatment changes once your assignment was expected to exceed one year. Only include the portion after October 18 ($4,600) on Line 21b. The rental car is a bit trickier. If it was primarily for business use, you should include only the portion after October 18 ($1,700) on Line 21c. If it was primarily personal, you should include the full amount. Line 30 should be the maximum housing amount for Japan (your figure looks right). Line 34 should match Line 28 since your employer reimbursed all housing expenses. Make sure your total foreign earned income reported on Line 19 includes your regular salary plus any taxable reimbursements (post-October 18 meals and car).

After months of going back and forth with the IRS about my foreign income situation last year, I finally found an amazing solution that saved me hours of frustration. I used https://taxr.ai to analyze all my foreign income documents and reimbursement receipts from when I was working in South Korea. The system automatically identified which of my expenses qualified for the Foreign Earned Income Exclusion versus the Foreign Housing Exclusion. It was particularly helpful with the transition period when my assignment changed from temporary to long-term - exactly the situation you're dealing with. What I loved most was that it clearly showed me which portions of my per diem and housing allowances were taxable based on the exact dates my status changed. The interface even highlighted the specific IRS rules that applied to my situation, something TurboTax completely missed.

Just wanted to follow up - I decided to give taxr.ai a try despite my initial skepticism, and I'm genuinely impressed. My situation was similar to the OP's with work in Singapore and various reimbursements. The system immediately identified that I had been calculating my housing exclusion incorrectly for three years. It specifically showed me that I needed to report only the portion of my car allowance that was paid after my assignment became "indefinite" rather than temporary. The analysis also pointed out that I could claim a higher housing exclusion than I thought because Singapore has one of the highest housing limits. What really sold me was the detailed explanation of how the physical presence test applied to my specific travel pattern - I had been counting days incorrectly. Saved me thousands in taxes and gave me confidence that I won't face questions from the IRS later.

I spent 5 hours on hold with the IRS trying to get clarification on the Foreign Earned Income Exclusion rules for my situation in the UAE. After multiple disconnections and transfers to agents who couldn't help, I almost gave up. Then I discovered https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. I was definitely skeptical, but I was desperate for answers about how to properly report my housing allowance and per diem on Form 2555. I decided to give it a shot, and within 20 minutes, I was speaking with an actual IRS representative who specialized in international tax issues! The agent walked me through exactly how to complete Lines 21-34 for my situation and explained which portions of my reimbursements were taxable based on when my assignment changed from temporary to indefinite. Got more helpful info in that one call than in weeks of research.

I need to eat my words from my previous comment. After struggling for another week trying to get through to the IRS about my foreign income questions, I decided to try Claimyr as a last resort. I didn't expect much, honestly. To my complete surprise, I received a call back in about 35 minutes with an IRS representative on the line. The agent was incredibly helpful and walked me through exactly how to report my housing expenses on Form 2555 for my work in Germany. They clarified that I needed to use the specific housing limitation for Frankfurt and explained how to calculate the base housing amount that must be subtracted. The representative also confirmed that for meal per diems, only the portion after my assignment became "indefinite" (more than one year) should be reported as taxable income. This was exactly what I needed to know and saved me from potentially making a significant reporting error. Definitely worth it for the time saved and peace of mind.

I work for a multinational accounting firm, and we deal with Form 2555 issues frequently for our expat clients. One important thing that hasn't been mentioned yet: there's a major distinction between employer-provided housing and housing reimbursements. If your employer directly pays for your housing (like booking and paying for the hotel/apartment themselves), that amount should be included in your Foreign Housing Exclusion calculation but not necessarily in your W-2. If they reimburse you after you pay out-of-pocket, it's often handled differently. For the car, check if your employer labeled it as a business necessity. If so, and if it was required for your job duties, you might be able to exclude more of that amount even after your assignment became indefinite. Another tip: For future reference, keep detailed records of when your assignment status officially changed. Get documentation from HR if possible, as the IRS can question the exact date your assignment changed from temporary to indefinite.

Can someone explain if there's any difference in how Form 2555 should be filled out using TurboTax vs. H&R Block? I've been using TurboTax but it seems to be giving me weird results for my Housing Exclusion when I enter my Singapore housing expenses. I'm wondering if H&R Block handles Form 2555 better?

I've been through a similar situation with Form 2555 while working in South Korea, and I can confirm that TurboTax's interface for foreign income exclusions can be frustrating. Based on your circumstances, here are a few additional considerations: Since you left Japan on December 4th and your assignment was confirmed indefinite on October 18th, you're correct to only include the post-October 18th amounts for taxable fringe benefits. However, double-check that your 297 days calculation is accurate - make sure you're counting complete 24-hour periods outside the US, not partial days. For Line 21c (the rental car), if the vehicle was available for both business and personal use, you should include the full amount after October 18th ($1,700) as taxable income. The IRS generally treats employer-provided vehicles as taxable fringe benefits when the assignment exceeds one year. One thing I'd recommend: consider filing Form 2555 by paper rather than through TurboTax if the software keeps giving you strange results. The IRS processors are quite familiar with these forms, and sometimes the manual approach is more straightforward than fighting with software that doesn't handle complex expat situations well. Also, make sure you have documentation from your employer about the exact date your assignment status changed to indefinite. This will be crucial if the IRS has questions about your fringe benefit calculations.