Deductions & credits

US citizens pay tax on worldwide income. If you meet the requirements, you can exclude up to $108,700 (2021 amount) in foreign earnings from your taxable income. You can also take a credit (or deduction) for foreign taxes paid on U.S. taxed income.

To enter foreign earned income in TurboTax, please follow these steps:

1. Click on Federal Taxes >  Income & Expenses
2. In the Less Common Income section, click START on  Foreign Earned Income and Exclusion.  
3. On the screen Did You Make Any Money Outside the United States? Select Yes and click Continue.  
4. On the screen What Form(s) Was Foreign Income Reported On?  Select Statement from my employer and click Continue
5. Continue through the screens, entering the requested information in U.S. dollars.

For more information on the Foreign Earned Income Exclusion, see Foreign Earned Exclusion on the IRS website.

If any of the income is taxable then you will want to enter foreign taxes paid, please follow these steps:

1. Click on Federal Taxes > Deductions & Credits [
2. Scroll down to the Estimates and Other Taxes Paid section.
3. Click START on the box next to Foreign Taxes.  
4. Continue 
5. Did you pay taxes on income outside the U.S.? Click Yes, I did..
6. Continue
7. Continue
8. Foreign Taxes, click Continue
9. Deduction or Credit? Most people choose the credit since so few itemize deductions. You can try it both ways and determine what is best for you. Select an option.
10. Continue to enter the information requested on the screens.