Oh, I get it now.

I paid the moving expenses out of pocket; I wasn't reimbursed. That's
the confusion I was having. Good to know I can deduct it

I moved on June 30, exactly the middle of the year. I have already
filed for an extension past July 1, 2008 so I will meet the physical
presence test. The rest seems pretty easy from there...

Thanks

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On May 22, 4:22 am, ben.a.bo...[at]gmail.com wrote:

- quote -

Yes, try to find that quote. The instructions form form 3903 say

<Quote source="http://www.irs.gov/pub/irs-pdf/f3903.pdf"
Filers of Form 2555
If you file Form 2555, Foreign Earned
Income, to exclude any of your income or
housing costs, report the full amount of
your deductible moving expenses on Form
3903 and on Form 1040. Report the part of
your moving expenses that is not allowed
because it is allocable to the excluded
income on the appropriate line of Form
2555. For details on how to figure the part
allocable to the excluded income, see Pub.
54, Tax Guide for U.S. Citizens and
Resident Aliens Abroad.

</Quote
What is the appropriate line of 2555?

Then take a look at


<Quote source="http://www.irs.gov/publications/p54/ch05.html#d0e8232"
Allocation of Moving Expenses

When your new place of work is in a foreign country, your moving
expenses are directly connected with the income earned in that foreign
country. If you exclude all or part of the income that you earn at the
new location under the foreign earned income exclusion or the foreign
housing exclusion, you cannot deduct the part of your moving expense
that is allocable to the excluded income.

Also, you cannot deduct the part of the moving expense related to the
excluded income for a move from a foreign country to the United States
if you receive a reimbursement that you are able to treat as
compensation for services performed in the foreign country.
Year to which expense is connected. The moving expense is connected
with earning the income (including reimbursements, as discussed in
chapter 4 under Reimbursement of moving expenses) either entirely in
the year of the move or in 2 years. It is connected with earning the
income entirely in the year of the move if you qualify for the foreign
earned income exclusion under the bona fide residence test or physical
presence test for at least 120 days during that tax year.

If you do not qualify under either the bona fide residence test or
the physical presence test for at least 120 days during the year of
the move, the expense is connected with earning the income in 2 years.
The moving expense is connected with the year of the move and the
following year if the move is from the United States to a foreign
country. The moving expense is connected with the year of the move and
the preceding year if the move is from a foreign country to the United
States.

Amount allocable to excluded income. To figure the amount of your
moving expense that is allocable to your excluded foreign earned
income (and not deductible), you must multiply your total moving
expense deduction by a fraction. The numerator (top number) of the
fraction is the total of your excluded foreign earned income and
housing amounts for both years and the denominator (bottom number) of
the fraction is your total foreign earned income for both years.

Example.

You are transferred by your employer on November 1, 2006, to Monaco.
Your tax home is in Monaco, and you are a bona fide resident of Monaco
for the entire tax year 2007. In 2006, you paid $6,000 for allowable
moving expenses for your move from the United States to Monaco. You
were fully reimbursed (under a nonaccountable plan) for these expenses
in the same year. The reimbursement is included in your income. Your
only other income consists of $14,000 wages earned in 2006 after the
date of your move, and $85,700 wages earned in Monaco for 2007.

Because you did not meet the bona fide residence test for at least 120
days during 2006, the year of the move, the moving expenses are for
services you performed in both 2006 and the following year, 2007. Your
total foreign earned income for both years is $105,700, consisting of
$14,000 wages for 2006, $85,700 wages for 2007, and $6,000 moving
expense reimbursement for both years.

You have no housing exclusion. The total amount you can exclude is
$99,245, consisting of the $85,700 full-year exclusion for 2007 and a
$13,545 part-year exclusion for 2006 ($82,400 times the fraction of 60
qualifying bona fide residence days over 365 total days in the year).
To find the part of your moving expenses that is not deductible,
multiply your $6,000 total expenses by the fraction $99,245 over
$105,700. The result, $5,634, is your nondeductible amount.

</Quote

So basically if you moved early in the year, it's as simple as for US
residents. When did you move?

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- quote -

I have no idea why they require it. The pre-requisites of the form are
as follows.

"You may use this form if you:
- Are a US citizen or resident alien
- Earned wages/salaries in a foreign country.
- Had total foreign earned income of $85,700 or less
- Are filing a calendar year that covers a 12-month period

And you:
- Do not have self-employment income
- Do not have business/moving expenses.
Do not claim the foreign housing exclusion or deduction."

Thanks for the reply. I thought I had seen somewhere that I couldn't
deduct the expenses even using the standard 2555. But now I can't seem
to find that entry. I'll post again if I find it.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On May 21, 6:28 am, ben.a.bo...[at]gmail.com wrote:

- quote -

Use regular form 2555. That form does not require you to have no
moving expenses. I think you should be able to take both the foreign
earned income exclusion and moving expenses.

But before you do that, why do they ask you to have zero moving
expenses for 2555-EZ? Is it supposed to reduce your foreign earned
income exclusion or something like that? I don't see any such thing
on form 2555 or the instructions of it.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Hi all. I'm a new expat, having moved to Switzerland on July 1, 2007.
I filed for an extension based on meeting the "physical presence test"
to make the foreign income exclusion on July 1, 2008. I moved my house
in July and have about $10k of moving expenses.

So now I'm filling out Form 2555-EZ for the foreign income exclusion.
The form states that I “do not have moving expenses”.

Does that mean that I can either choose from the foreign income credit
or the moving expenses (line 26 on 1040 or Form 3903)?

It doesn't seem right that they should be mutually exclusive. Please
help.

Ben..

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >