Although you may qualify for exemption from income tax on your foreign income, it is still subject to self-employment (social security) tax, which is about 15% of your self-employment net income. That may be why your refund is reduced when you add your self-employment income. The self-employment tax is listed on line 4 of Schedule 2.
You can view your form 1040 and schedule 2 while working in the online version of TurboTax by following these steps:
While working on your return in the Federal section of TurboTax:
1. Choose the Tax Tools icon on your left menu bar
2. Tools
3. View Tax Summary
4. Choose the Preview my 1040 on your left menu bar
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