rc11
Level 2

Foreign Earned Income Exclusion Bug

It looks like I am eligible for the Foreign Earned Income Exclusion; however, the software is still taxing me on my Foreign Earned Income.

ThomasM125
Expert Alumni

Deductions & credits

You may have a problem with this because of the dates you entered. I suggest you contact us so an agent can do a screen share with you to see what you entered. Please use this link to find ways to contact us:

 

https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

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pk
Level 15
Level 15

Deductions & credits

@rc11 , can you give us the dates / data-- (a) departure from the USA; (b) arrival date in the foreign land; (c) is this your first year abroad;  (d) are you US citizen/Resident ( green Card  );  (e) which country ;  (f) are  you employed by a foreign entity or self-employed abroad.  This should give enough information to answer query.

rc11
Level 2

Deductions & credits

a/b) Never lived in the US. Immigrated to the US on 9/13/19. 

c) N/A

d) Green Card

e) Peru

f) Yes, all salary was earned prior to 9/13

 

---

 

Note: This is filing as a joint married application. One is a USA citizen, the other is a foreign spouse.

pk
Level 15
Level 15

Deductions & credits

@rc11  you basically have two choices ----

 

(1)  because you entered the country  in the last quarter of the year  and you are trying to exclude from US taxes  earnings  from a foreign source prior to entering the USA as an immigrant,  you and your spouse could file as Married Filing Sep ( MFS ).  This would allow you to claim Non-resident alien  till the date of entry  and therefore  ONLY US sourced income  during the Non-Resident period will count -- since there is none  you essentially file a short year 09/13/2019 thru 12/31/2019 on form 1040 claiming  world earnings during that period.

(2) File as Married Fling Joint and this would be for the whole year and be taxed on your world income -- it would be much more convoluted  but will achieve  exclusion of your foreign earnings up to the limit ( Jan 1 , 2019 through Sep 8, 2019 ) . However, because your earnings were   self-employed , you would also be subject to Self-Employment Tax ( 15.3%   of net earnings for Social Security and Medicare ). even on the excluded amount.

 

Is there more I can do for you ?

View solution in original post

rc11
Level 2

Deductions & credits


However, because your earnings were   self-employed , you would also be subject to Self-Employment Tax ( 15.3%   of net earnings for Social Security and Medicare ). even on the excluded amount.

This is very helpful, thanks! I believe this part is why I was confused about being qualified for the exclusion, however, I was still being taxed.