Deductions & credits

To enter the portion of your self-employment income that was considered foreign earned income follow these steps:

• Login to TurboTax.com.
• Click on the Search Tool (magnifying glass).
• Type in the term foreign earned income.
• Select the Jump to link in the search results.
• Answer Yes to the question: Did you make any money outside the U.S.?
• On the next screen, check the box beside A Form 1099-MISC or other self-employment income.
• Click continue and then enter the profit attributable to the foreign income.  (If all of your income was earned outside of the U.S., this is the same as your Schedule C, Line 31.)
• Continue through the rest of this section - which is about the foreign earned income exclusion (FEIE).  
• If you do not qualify for the exclusion, TurboTax will delete Form 2555 and indicate that you may be eligible to claim foreign tax credits instead.  If you do qualify but are electing not to use the exclusion, answer the physical presence question using dates that will disqualify you. 
  • Note that if you have used the FEIE in the past and qualify but do not use it this year that you will revoke your election, and you cannot use the exclusion for five (5) years without first gaining permission from the IRS.

After following these steps, you should be allowed to enter your foreign taxes paid in the foreign tax credit section.