2021 housing cost tax break amounts for U.S. expatriates

February 28, 2021
Positano Italy Amalfi Coast Italian tourism agency

A panoramic view of Positano, Italy, the famously vertical town where actor and food/travel show host Stanley Tucci found the highly-desired Amalfi Coast lemons. (Image courtesy Italia Agenzia Nazionale Turismo)

Tonight, the hubby and I will watch our latest favorite television series, Stanley Tucci: Searching for Italy.

The CNN show is part travelogue, but with routes determined by Tucci's tastes, which are so far spectacular. The award-winning actor, director, screenwriter, Instagram bartender and cookbook author (you're not surprised, are you?) essentially is eating his way through Italy, the county from which both sides of his family hail.

He started in Campania, a region that includes the Amalfi Coast and its famed lemons. Tucci traveled to Rome for the second episode, which featured a resident known as Don Pasta and what Tucci and his producer deemed a perfect cacio e pepe.



The hubby and I tonight are heading vicariously with Stanley to Bologna.

Taking U.S. taxes on your overseas move: Like many Americans, we talk now and then — and more so since we've been largely confined to our home during the COVID-19 pandemic — of moving to Europe.

Italy has always been high on our list of possible pack-it-all-up places. Tucci's show has propelled it to number one.

Of course, as expatriates in Italia, we'd still be liable for U.S. taxes. The only way to do that is to totally relinquish our American citizenship. Despite my frustration with my native land, I'm not quite ready for that. Plus, there are some hefty financial and tax costs to that move, too.

But as I noted last fall in Part 8 of the ol' blog's series on 2021 tax inflation adjustments, there are some ways to offset some of the U.S. taxes that still apply when you live and work abroad.

Annual housing abroad adjustments: One of those is the tax exclusion (or deduction if self-employed) that overseas workers get from gross income for a certain amount of housing costs.

My prior tax inflation series post goes into more detail here, but I'm bringing it up again today because the Internal Revenue Service just released the 2021 adjustments to the limitation on housing expenses for certain more expensive places to live worldwide relative to housing costs in the United States.

Of course, I immediately scrolled down that table in IRS Notice 2021-18 to Italy.

The basic housing expenses limit in 2021 is $32,610 for the full year. Nine Italian locales get higher allowances. They are:

Aviano at $40,500 Parma at $38,600
Genoa at $41,800 Rome at $50,800
La Spezia at $40,400 Turin at $38,000
Milan at $75,900 Vicenza at $42,400
Naples at $52,100  

 

Those are some wonderful Italian locations and lots of numbers. However, this week's By the Numbers honor goes to the IRS document that contains them and more, Notice 2021-18.

If you're looking at moving abroad for work, check out the notice's full table to see how the housing costs in your potential new home compare to U.S. residential expenses.

Another Italian cinematic dish from Tucci: And if you just want to gawk at Italy and drool over some fantastic food, check out Tucci's show. You can catch it online if you don't have a TV or don't get CNN with your cable or dish subscription.

The good news for all us fans is that it's already been renewed for a second season. Even through tonight is the half-way mark of season one, I'm already looking forward to next year's culinary and country adventures.

I'm also hoping that in season two Tucci brings along fellow award-winning actor Tony Shalhoub and "Big Night" costar for a quest for the best timpano.

Yes, that's hair on Tucci's head. It was 1996. Time catches up to us all, so the lesson is to enjoy life, and food, while you can. And, of course, pay as few taxes as legally possible!

You also might find these items of interest:

 

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