Is housing allowance factored in 87,500

[sunking]

Hey guys , a question for you USA expats. Is the housing and transportation allowances part of the 87,500 tax free dollars?

[GAGing in Bahrain]

The $87,500 limit is only for foreign earned "income", which typically means salary, bonus, etc... Housing exemption is separate and location based. Transportation is not exempt unless you count it as a moving expense.
See IRS Publication 54 for more details. You can download Pub 54 directly from the IRS website, or better yet Google "IRS Pub 54". :ok:

[saviboy]

somebody told me that if you live outside of the US for more than 330 days/year, you are exempt from paying tax.
any truth to this?

[southflyer]

Here, if your SOPs don't put you to sleep, this might...


Sec. 911. Citizens or residents of the United States living abroad (http://4taxhero.com/www/t26-a-1-n-iii-b-911.html)

Sec. 861. Income from sources within the United States (http://4taxhero.com/www/t26-a-1-n-i-861.html)

Sec. 862. Income from sources without the United States (http://4taxhero.com/www/t26-a-1-n-i-862.html)

Sec. 863. Special rules for determining source (http://4taxhero.com/www/t26-a-1-n-i-863.html)

Sec. 864. Definitions and special rules (http://4taxhero.com/www/t26-a-1-n-i-864.html)


...and if one can't have enough..... well, here is the entire code, I read it all myself :)

Internal Revenue Code (26 USC) (http://4taxhero.com/www/contents.html)

[GAGing in Bahrain]

southflyer's info is valid, but IRS Publication 54 has all the info for foreign filers for the last tax year (2007). It's an easier read too:}

IRS Pub 54 (http://www.irs.gov/publications/p54/index.html)