No you would enter full Gross income amount before expenses. The point of claiming the foreign income exclusion or the foreign tax credit is to avoid double taxation with a country that has a tax treaty in the US. Foreign tax is assessed on gross income minus expenses that are listed in this section such as cost of living , family cost, home, meals etc. This section does not regard normal business expenses as a reduction of gross income.
On the other hand, business expenses are important in your US return so that you are charged the right amount of SE tax to report in your return. You then exclude the net income from your return in the manner I prescribed, leaving the SE tax in your return. Make sense?
Please reach out if you have additional questions in your return.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
