Hi,
For form 2555, foreign income exclusion, if I am self employed, where do I put my income, and do I report my gross receipts or net income?
The instruction for form 2555 is confusing too. It is not helpful for self-employed. I have seen calculation examples for gross receipts over the foreign income threshold but cannot find any for below the threshold.
I know that your expenses and the 1/2 self employed exclusion has to be added on, as you cannot claim for them twice.
For example, if my gross receipts are $95K, and $27K expenses, then my net income is 63K. So do I report 68K as my income on form 2555, and which section, because there only appears to be one section for wages and salaries, which I thought was for employed individuals only.
Or do I report 95K as my income and then on line 44 report my expenses (27K+4,8040.47 Self employed 1/2 tax)? This would give a exclusion of 631959.53.
Since my net income on form 1040 shows as 68000, I would deduct the 631050.53 and the 1/2 self employed tax on the next section to give 0 income tax.
Is this correct or did I do this wrong?
I know that self-employed tax is due at then end, its just the form 2555 for self-employed that is confusing me.
