@mattison-hinelin , the answer from @KurtL1 , while correct to the extent covered misses one critical factor -- the tax computation itself to explain the discrepancy seen by you .
The purpose of US taxation ( and not looking into Self-Employment Tax -- this is flat tax based on the net income from self-employment irrespective of the source of income i.e. whether US or non-US sourced ), the tax computation actually uses your world income ( US PLUS all other sources of income ) -- thus putting in a higher bracket. Then it subtracts that portion of the tax that can be allocated to the foreign excluded income. Therefore you will see a difference in the tax computation when you add your foreign income. This is despite your AGI being computed as a difference between world income and foreign excluded income.
Hope this clarifies the issue
