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Deductions & credits
Assuming you didn’t double-enter the foreign income (in which case you’d see the $30k on some other line of the 1040 besides just 1h and 1z, or you’d see it twice on Schedule 1), I’m concerned this may be an example of the annoying “stacking rules” part of the foreign exclusion (discussed here), costing you some money.
Although the foreign income itself is indeed excluded from taxation, the rest of your income is taxed as if it were included, so you end up with the same amount of taxable income, but possibly with some or much of it in a higher bracket.
This could be the case with a lower total income amount (where the standard or itemized deduction would normally render much of it non-taxable, but the excluded foreign income pushes it up into the 10% bracket), or a higher income amount (where some 12% income ends up being taxed at 22%, 24% income at 32%, etc.). And the amount of the (unexpected and frustrating) tax increase depends on exactly how much income is pushed into higher brackets, and the difference between the brackets.
When you’re able to print out your whole tax return, you should see a “Foreign Earned Income Tax Worksheet,” where you can see this playing out (if you want to do the math). But you can also just locate your 1040 line 15 income amount in the IRS Tax Tables, and if you’re mysteriously paying significantly more than the result, then we have our answer (which can’t be fixed, unfortunately, as it’s just the Internal Revenue Code in action…).
@Pooja Singhi, hopefully you found a double-entry of the $30k (see my second paragraph) that can be fixed, but if you didn’t and it’s the stacking thing, I hope I at least helped with some clarity!
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