Question

How do I fill out:2020 Foreign Earned Income Excluded Less Related DeductionsTotal Foreign Earned Income Less Related Deductionswage is $200k

Forum|Forum|4 years ago
October 20, 2021
1 reply
0 views

No text available

TurboTax Premier Online

Employee

@Wndwo , should we assume that you are US citizen/Resident ( Green Card ); that you do meet the Physical Presence Test ( 330 Days away from the USA within a 12 month test period) ; that your foreign earnings are NOT from US sources ( US govt. or any of its subsidiaries or from an US employer ) ? ,

If all of this is true then --

(a) for wages --- you do NOT enter your wages under wages but go down to " other uncommon incomes " and select " foreign earned income and exclusion" . This will allow you to enter the details of your earnings on form 2555 and allow the exclusion.

(b) for self-employment --- you need to enter the details of your income and expenses just as if you were self-employed in the USA -- i.e. Schedule-C entries. This will also result in a schedule -SE being included with your return . Thereafter you have to ask and enter the net income ( from Schedule-C ) - on form 2555 " foreign earned income and exclusion " --- this would allow you to exclude the foreign self-employed income to the extent allowed.

Does this answer your query and/or do you need more help ?

W

WndwoAuthor

@pk12_2 , thank you for the reply!

Your assumptions are all correct - US citizen working abroad, meet Physical Presence Test (I pass Bona Fide Test, too), and my earnings are NOT from US sources.

I also fall into (a) for wages category.

To make sure I understand this correctly,

- 2020 Foreign Earned Income Excluded Less Related Deductions: I would enter Line 42: Foreign earned income exclusion on Form 2555

- Total Foreign Earned Income Less Related Deductions: I would enter Line 19: Total wages, salaries, bonuses, commissions, etc.

Please let me know if this is correct, and thank you so much again for your help. (I know there are many others in the community that have the same questions and will really appreciate your response!)

P

pk12_2

Employee

@Wndwo , First an apology for this delayed response-- please forgive.

Second, I am not sure that I understand what you are doing when you refer to line numbers of a form. This is because if you are using TurboTax to prepare your return, It is a very bad idea to work on the forms directly ( often this will invalidate the "checks " that TurboTax does for consistency and accuracy ) -- you should do this ONLY on the associated worksheet. And even then you should be very familiar with the form structure / intent and the tax laws. Suggest you let the TurboTax do these tasks and in the interview / "step-by-step" mode. Use the forms mode to see that the forms have the expected numbers ( both entered and/or calculated).

Third and only if you still need help, I have had the opportunity to work through an example with 1. foreign wages; 2. foreign self-employment income; and 3. foreign tax credit. Must say there are areas of the step-by-step was not quite explicit in what it was asking for but at this time the forms, the worksheets all match my expectations. So if you need help, I could talk about the screens sequence and what I did where.

stay safe