FAQs - Deductions
Can I deduct mortgage interest and real estate taxes paid on my foreign residence?
Yes, you are typically allowed the same deduction for mortgage interest. However, effective with tax year 2018, foreign property/real estate taxes paid are no longer eligible as an itemized deduction. The deductions are taken on Schedule A, assuming the standard deduction is less than the total of your itemized deductions. You may be able to deduct/exclude other foreign housing costs, depending on your situation.
What is the tuition and fees deduction?
Students and their parents may be able to deduct qualified college tuition and other related expenses of up to $4,000. This deduction is an adjustment to income, which means the deduction will reduce the amount of your income subject to tax. The Tuition and Fees Deduction may be beneficial to you if you do not qualify for the American opportunity, Hope, or Lifetime Learning credits.
You cannot claim any of the education credits if you claim a tuition and fees deduction for the same student in the same year. To qualify for an education credit, you must pay post-secondary tuition and certain related expenses for yourself, your spouse or your dependent. The credit may be claimed by the parent or the student, but not by both. Students who are claimed as a dependent cannot claim the credit.
I’ve paid tuition to a foreign educational institution. Are these expenses eligible for a deduction or credit?
In general, these expenses will not be deductible or eligible for a credit unless they are accrued from an eligible educational institution.
Qualified expenses are amounts paid for tuition, fees and other related expense for an eligible student that are required for enrollment or attendance at an eligible educational institution. An eligible educational institution is a school offering higher education beyond high school. It is any college, university, vocational school or other post-secondary educational institution eligible to participate in a student aid program run by the U.S. Department of Education. If you aren’t sure if your school is an eligible educational institution:
• Ask your school if it is an eligible educational institution
• See if your school is on the U.S. Federal Student Aid Code List
Are charitable donations to foreign charities deductible on my U.S. tax return?
In general, these charitable donations will not be deductible on your U.S. tax return. To be deductible, charitable donations need to be made to qualified organizations. A qualified organization is generally one that has received 501(c)(3) status from the IRS. If you are unsure, you can ask any organization whether it is a qualified organization, and most will be able to tell you. Or you can use the tool here to search for qualified organizations.