I am a U.S. resident alien filing as Married Filing Jointly (MFJ) with my husband, who is a self-employed sole proprietor in India. He lives in India, his business is based there, and he has no U.S. income or clients. He doesn't even have SSN and I'm applying ITIN for him so I'm paper filing my tax. I want to correctly report his income in TurboTax. I have no doubts related to my income reporting but his I have bit of doubt as this is my first time.
For reporting his income, I have completed all the steps as below:
1. Reported my spouse business income in Schedule C
2. Reported the Farm income in Schedule F (Since he is actively involved and SE tax is calculated for this income too)
3. In Foreign Earned Income & Exclusion section he did qualify for exclusion so I put all the gross income from both & turbotax automatically deducted 1/2 of SE tax from it.
4. In federal review page, it shows as - Other income, -$XXXX
It looks like the amount I entered in FEIE after minus of 1/2 SE tax it is showing up as other income with minus sign.
My question is does this complete all the steps or do I need to manually exclude his net income so that his income is not double taxed or FEIE section automatically excludes it ? He does qualify for Bonafide presence test in FEIE section meaning qualifies for full exclusion.
Do I need to do these additional steps to exclude the net income amount -
- Select Wages and income
- Less Common income
- Miscellaneous Income, 1099-A, 1099-C
- Scroll to the bottom of the page to Other Reportable Income
- Other taxable income, answer yes
- Then give a brief description of the income and the amount listed. Here you will list this as Foreign Self-employment income excluded and record the net income as a negative number by placing a minus sign in front of the amount.
Do I still need to do this manual exclusion ? Or is it not required as turbo tax will handle it on its own. Looking forward to your guidance.
