Ok ... you have to understand that the foreign income may be excluded HOWEVER it is used to calculate the tax rate that is used on the return. Review form 2555 to see how this happens.
Until you entered her foreign income you may have been in the 10% tax bracket but after you entered it (and before it is excluded) your income may be in say the 22% bracket and that is what is used to calculate the tax. Also adding more income can reduce or eliminate certain credits, adjustments and/or deductions (even if the income is excluded) and it affects the taxable portion of your SS benefits. I highly recommend you save a PDF of the return with & without the foreign income to see how it affects the entire return.
