Question

TT 2023 not populating FEIE - Foreign Tax Credit Computation Worksheet

Forum|Forum|1 year ago
October 1, 2024
2 replies
0 views

I'm a US citizen living/working abroad. I'm reporting my foreign income and taxes, and under the Foreign Taxes section TT doesn't seem to work correctly. I completed entering all income and taxes paid data, and towards the questionnaire there's a page titled "Reduction in Foreign Taxes". The first 2 questions on this page don't populate any values for me, even though this should be carried over from form 2555 if I'm not mistaken:

- 2023 Foreign Earned Income Excluded Less Related Deductions: zero is shown, it should be 120,000 for me

- Total Foreign Earned Income Less Related Deductions: zero is shown, it should equal to my total income I entered already.

Is this a software bug, or did I enter something incorrectly somewhere that prevents TT to find the correct values?

I checked TT2022 and it seemed to correctly work there.

A

Anonymous_

Employee

No text available

P

pk12_2

Employee

@Mike414 , let us start with the assumption that TurboTax is misbehaving for some reason. Please provide more data for your situation:

(a) Which is your tax home in ( most time spent in , if multiple countries) ?

(b) Date for your test period ( continuous 12 month period where in you have been abroad for 330 days )?

(c) Where did you enter your foreign earned income --- Under personal incomes and "Foreign Earned Income Exclusion" ?

(d) Am not sure why the foreign taxes paid had to be entered ( because if you choose FEIE and unless you claim results in unexcluded income, there is no foreign taxes needed to be considered ) -- please tell me more on this.

(e) Are you also claiming Foreign Tax credit on passive income and if so from which country ?

(f) On form 2555 , what is the excluded income on lines 33, 36, 42, 43, 45 and 50 ? How about Schedule 1 lines 8d and 24j ?

Please answer and I will circle back once I hear from you .

M

Mike414Author

Hi pk,

a) Tax home is a foreign country. I moved here 3 years ago, so not a new thing.

b) Test period is from jan1st to dec 31, I fully meet the physical test, I've been living in this country all year.

c) Foreign income: there was small portion for which I got a W2, but the majority was entered under the FEIE section

d) I need credit on foreign taxes as I earned more than the exclusion limit. I paid taxes on my entire income in the foreign country, and I need to pay taxes in the US for the portion that is above the exclusion limit, so I need the tax credit to avoid double taxation.

e) I have a very small credit coming from a K-3, some investment received foreign income on which they paid taxes. The country is not even specified as it's some sort of fund. It's not my home country, but some other countries. This is very small, like under $100.

f) line 33: 0

line 36: blank

line 42: 120,000

line 43: 120,000

line 45: 120,000

line 50: blank

Schedule 1 8d: -125,076 (120k is mine, the 5,076 is coming from my wife's exclusion)

24j: blank

I appreciate you looking into it. I read the instructions for Form 1116 Comp Wks, and essentially the problem is that TT doesn't fill in cell 12a1 and 12a2 on this form. Based on the instructions, the values for these cells are coming from Form 2555, and I do have the correct values there. Also, it seems like it worked in TT2022, I went back to the program and when I get to that page in the questionnaire, the values are showing up in TT2022.

P

pk12_2

Employee

@Mike414 , thank you very much for your detailed response. Nothing stands out from this . So I will have to simulate on my copy of Windows H&B and see why itis misbehaving. It will take a bit of time -- so probably sometime tomorrow morning I should be able to come back. You did not provide the country -- Should I assume that it is a country which has a Tax Treaty with the USA in effect ? How about Totalization agreement ?

Did I understand that your spouse is also with you and has Foreign Earned Income Exclusion ? If you have been abroad all year how did you end up with a W-2 ( as you seem to have ref'd ) --or is it for your wife ( implying she does not meet the same Physical Presence test period )?

So it looks ;like it is the 1116 that is having issues --- let me work on this . And yes it should have followed from 2555.

Except for these items, I think I have enough to simulate the situation.

pk