The Turbotax Facts:
Married Filing Jointly, - Wife is non-resident alien and
qualifies (through the turbotax program screens) for 100% exclusion of her
income. We live and work in Japan.
My US Navy reserve income/W2 Info:
Wages: 33,318.00 Fed Income Tax: 3928.50
SS Wages: 33,318.00 SS Tax:
2065.72
Medicare wages: 33,318.00 Medicare Tax: 483.11
After entering only my wages (but showing us as married
filing jointly) the estimated Refunds were:
Federal Refund: $2,676.00 and
State (OR): $978.00
The Federal Refund (my concern) is broken down by hovering
the curser over the refund amount and showed: Income and Adjustments
$33,318. Deductions $12,700. Taxable Income $12,518. Total
Tax $1,252. Total Payments $3,929. Refund/Tax Due $2677
As soon as I entering my wife’s income ($94,333) in the
“Foreign Earned Income and Exclusions” section of the “Less Common Income” area,
the estimated refunds changed to:
Federal Refund: $798.00 and
State (OR): $1,149.00
The Federal Refund now shows: Income and Adjustments
$33,318. Deductions $12,700. Taxable Income $12,518. Total
Tax $3,132. Total Payments $3,929. Refund/Tax Due $797.
At the end of the process of determining the exclusion
amount, Turbotax stated:
“Congratulations! XXXXXXX’s foreign earned income exclusion
is $94,333. You will not pay U.S. tax on
this amount.”
But it
did not change the refund amount back. Why
would our Total Tax changed based on something that we “will not pay U.S. tax
on”?
