@hk999 Read my first reply at the top of this thread (at the link below). The foreign income is not taxed, but it affects the calculation of the tax on the U.S. income. The foreign income pushes some of the U.S. income into a higher bracket. Your top tax bracket might not change, but more U.S. income is pushed into that bracket.
Here is a direct link to my earlier reply above.
https://ttlc.intuit.com/community/taxes/discussion/re-foreign-earned-income-exclusion-bug-not-actual...
