Get your taxes done using TurboTax

DS30 · ‎June 6, 2019

You can start with the TurboTax deluxe version and if you need to upgrade, the TurboTax system will prompt you to do so (and transfer your data to the new upgraded version). The Foreign Income and Exclusion Form (Form 2555) is included with Deluxe, Premier, and Home & Business (the online version is called "Self-Employed").

Related to the sale of your home -

If this was your primary residence prior to your move, you may be eligible to exclude the gain under the home gain exclusion.

You can take the gain exclusion as long as you considered the home your "primary residence" for 2 of the last 5 years. If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income. You may qualify to exclude up to $500,000 of that gain if you file a joint return with your spouse.

If you did not use the home as your primary residence for 2 of the last 5 years and meet the home gain exclusion requirements, you may still be eligible for partial exclusion if you can show the main reason you sold your home was because of a change in workplace location, for health reasons, or because of an unforeseeable event

See Sale of Your Home for more information on the exclusion.

You do not need to enter the sale of your primary residence if:

You never used your primary residence as a rental
You have a loss on the sale of your home (Personal use capital losses are not reported on your tax return)
You did not receive a Form 1099-S and
You meet the home gain exclusion

If you still need to enter your sale of your primary residence,, please follow these steps:

Once you are in your tax return (for TurboTax Online sign-in, click Here), click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
Next click on “I’ll choose what I work on”
Scroll down the screen until to come to the section “Less Common Income”
Choose “Sale of Home (gain or loss)” and select “start’
You will want to use the "Easy Guide" to determine the adjusted basis on this home

Say "yes" that you sold your main home and TurboTax will guide you on entering this information. You will need:

The date you sold your home and the selling price (from your closing statement)
The date you bought your home and the purchase price (from your closing statement)
The cost of any major improvements you made, so we can deduct them for you
Form 1099-C if you sold your home at a loss (short sale)

Just remember to check the box to have your home sale reported on your tax return but ONLY if you receive a 1099-S

Related to your move overseas -

Here is some additional information that you will need to know about moving overseas:

You will need to report your foreign source income (in USD) from the time you started your foreign employment until 12/31/2016. So if your foreign salary is on a fiscal year basis, then you will need to determine what portion of that salary was earned between when you started your foreign employment during 2016 and the end of the 2016 calendar year.

The Internal Revenue Service has no official exchange rate. The IRS will normally accept any posted exchange rate that is used consistently. You can translate the foreign currency to U.S. dollars using the yearly average currency exchange rate for the tax year. In general, use the exchange rate prevailing (i.e., the spot rate) when you receive, pay or accrue the item. Please refer to the following IRS links for more information about Foreign Currency and Currency Exchange Rates and Yearly Average Currency Exchange Rates

If you are still living outside the US and if you meet the Bona Fide Residence Test or the Physical Presence Test , you will be able to claim an IRS - Foreign Earned Income Exclusion that would exclude a portion of your foreign source income (up to $101,300 for 2016). You may also be able to take advantage of the foreign housing deduction .

You can get an extension of time to file your tax return if you need the time to meet either the bona fide residence test or the physical presence test to qualify for either the foreign earned income exclusion or the foreign housing exclusion or deduction. The tests, the exclusions, and the deduction are explained in Foreign Earned Income Exclusion.(see more information below)

To enter your foreign earned income in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here)and type "foreign earned income" in the search bar then select "jump to foreign earned income". (Alternatively you can get to this section under Federal Taxes> Wages and Income>I'll choose what I work on (or jump to full list or see more income)> Less Common Income (show more)> Foreign Earned Income and Exclusion). TurboTax will guide you on entering this information.

You will be allowed an automatic 2-month extension if you are a U.S. citizen or resident alien and on the regular due date of your return:

You are living outside of the United States and Puerto Rico and your main place of business or post of duty is outside the United States and Puerto Rico, or
You are in military or naval service on duty outside the United States and Puerto Rico

The IRS notes that even if you are allowed an extension, you will have to pay interest on any tax not paid by the regular due date of your return. So this 2-month extension only allows you to escape late filing penalties. You will need to attached a statement to your federal income tax return that states which of these 2 reasons you are claiming as your reason for the 2-month automatic extension

If the April 15th (April 18th for 2017) deadline is approaching and you feel that you will need more than 2 months or just to be on the safe side, you can always file a 6-month extension using form before the original tax return deadline.

Use this link for more information about Filing for a 6 month extension in TurboTax

Having a US mailing address will not affect your claim for the automatic 2-month extension but it may have an effect on state tax issues if you maintain a residence in the US while you are abroad.

You can get an extension of time to file your tax return if you need the time to meet either the bona fide residence test or the physical presence test.

You should request an extension of time to file if all three of the following apply:

You are a U.S. citizen or resident alien,
You expect to meet either the bona fide residence test or the physical presence test, but not until after your tax return is due, and
Your tax home is in a foreign country (or countries) throughout your period of bona fide residence or physical presence, whichever applies.

Generally, if you are granted an extension, it will be to 30 days beyond the date on which you can reasonably expect to qualify under either the bona fide residence test or the physical presence test. However, if you have moving expenses that are for services performed in 2 years, you may be granted an extension to 90 days beyond the close of the year following the year of first arrival in the foreign country. You may file Form 1040 any time before the extension expires.

How To Get An Extension

To obtain an extension, you should file Form 2350, Application for Extension of Time To File U.S. Income Tax Return, with the Internal Revenue Service office as specified in the instructions for Form 2350

Please note : If you have foreign bank accounts, you may be required to file a Report of Foreign Bank and Financial Accounts (FBAR) if are a US citizen or resident and::

you had a financial interest in or signature authority over at least one financial account located outside of the United States; and
the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

To be directed to the US Treasury Government Website to prepare a Report of Foreign Bank and Financial Accounts, click FBAR (TurboTax does not support this form)