Tax Tips for U.S. Expats in the United Arab Emirates
Check out these tax tips to maximize your U.S. Tax situation while living in UAE.
If you live in the UAE for all or a portion of the year, you may be entitled exclude all or part of your earned income from U.S. tax. Eligible taxpayers can claim an exclusion based on their time spent abroad during the year and any housing expenses incurred while living abroad.
If your employer provides your housing as a part of your employment compensation, you are still entitled to claim the fair rental value of that housing as a housing expense for the purposes of your foreign housing exclusion. However, your ability to claim a tax benefit for employer provided housing may be limited based on your wage income.
There are several ways to be eligible to claim the foreign earned income exclusion and housing exclusion. During the first year you are present in the UAE, you will need to be abroad for a full 330 days during the calendar year to claim the full amount of the exclusion. However, you may be eligible for a partial exclusion if your 330 day period falls only partly within the calendar year.