Jeremy,an American citizen,earned $200,000 during 2016 while employed in Switzerland.Jeremy is entitled to the maximum foreign-earned income exclusion.Jeremy also incurred $40,000 of deductible expenses attributable to the foreign-earned income.Jeremy may deduct how much in expenses?

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The maximum foreign-earned income exclusion for 2016 is $101,300, which Jeremy is entitled to. Therefore, his taxable income would be $200,000-$101,300=$98,700. Since Jeremy has deductible expenses of $40,000, he may deduct the smaller of his expenses or his taxable income, which would be $98,700. So, his deductible expenses would be $40,000-$19,740 (assuming he is in the 24% tax bracket) = $20,260.

Jeremy,an American Citizen,earned $200,000 During 2016 While Employed in Switzerland