You should report your W-2 income as it is stated on your W-2 form. If you have foreign income that is not reported on the W-2 form, you can enter it in the Less Common Income section of TurboTax, then Foreign Earned Income and Exclusion. You'll be asked if your foreign income was reported on your W-2 form, to which you have to enter "no" if that is true. You don't have to apply for the exclusion to enter your foreign income in that section.
The way the tax treaty income exemption works is you report your income and then enter a negative adjustment to remove the income exempted by the treaty. Since you are entering your foreign income and then exempting it, I'm not sure if there will be any tax benefit to you regarding tax credits though.
You can make that adjusting entry in TurboTax as follows:
1. From the Federal menu in TurboTax find Wages and Income
2. Find Less Common Income
3. Choose Miscellaneous Income, 1099-A, 1099-C
4. Choose Other Reportable Income
5. Enter a description of the treaty and the adjustment as a negative number
You must complete Form 8833 Treaty-Based return position disclosure and include with your return. That form is not available in TurboTax, so you will need to complete that separately and attach it to your tax return that you would mail in. Here is a link to the form: Treaty income adjustment
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