I am going to give you complete instructions on how to enter this correctly and hopefully clarify any confusion that may have developed from the earlier posts. Hopefully this will provide clarity and leave no room for doubt.
- First of all, enter your Schedule C income and expenses. This is done to determine your self-employment tax that you will need to pay.
- Next we will negate your resulting net profit information provided above. We only did this to determine your self-employment tax. We negate this income so you won't be double-taxed on the same income when you report this as foreign income in the foreign income and exclusion section.
- Select Wages and income>other income
- Miscellaneous Income, 1099-A, 1099>start
- Scroll to the bottom of the page to Other Reportable Income
- Other taxable income, answer yes Then give a brief description of the income excluded and the amount of Schedule C net profit generated above. This will not erase your self-employment tax though that you need to pay. Be sure to put a minus sign in front of the amount you are excluding.
3. Now begin working on foreign income and exclusion.
4. Follow the instructions. Enter the deductions again. Be sure to enter the self-employment tax as a deduction.
5. As the instructions dictate, enter the gross amount of your foreign self-employment income here and the enter the business expenses, including the self-employment tax.
If you have any further questions, please reach out. Hopefully I have presented this information logically that leaves very little room for doubt.
@ned415
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