Thank you @pk for your explanation regarding the exclusion process. Looks like self employment tax is taken from worldwide income after expenses but before the standard deduction.
To clarify, I do qualify for FEIE due to the physical presence test. I've been out of the US for several years now continuously. I just happen to have residency in a foreign country since May of last year.
Not to anyone reading this in the future. Turbo tax online's current version does not calculate Foreign Earned Income Tax exclusion correctly and should not be used for this purpose.
A correct calculation for someone qualifying for FEIE would remove all of their income tax and will leave only self-employment tax which is based on wages or business income after expenses. The percentage of self-employment tax will stay the same (15.3%) up to $160,200.
