@aussiebobaustin , sorry for the confusion . If you choose to not have to pay US taxes on this Australia sourced income i.e. keep the income from US taxable income while still meeting your burden of declaring work income for federal purposes:
(a) You enter this income as pension ( whether paid at regular intervals or total ) . You can use a dummy 1099-R ( your particular version of TT may allow you to declare pension with not 1099-R ), use pension distributor name ( what it is ), , EIN as 00-0000000 or an arbitrary number like 12-1234567 -- an obviously fake # , provide all the distribution agents name address etc. as actual, Distribution amount in US$, Taxable amount as the same as Distribution amount, No taxes withheld and select code that applies etc. Note that you can down load a copy of 1099-R from www.irs.gov and use this as reference while providing answers to TT.
(b) Then from the forms tree choose form 8833. Fill this out as to the distribution amount and include the treaty article under which you are claiming non-taxability by US. This should result in a negative amount showing on Schedule-1 and thus reducing your US taxable amount. See here for the form and instruction for 8833-->
About Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) | Internal Re...
Thereafter i.e. after filing and acceptance of your return for processing by the IRS, you are done for the year. Note that your State of residence may or may not tax this amount.
(c) Because of this exclusion , there is a general assumption that you file proper paperwork for Australia to have the chance to tax this income. Whether they do or do not is up to them. I also do not believe that IRS would actually vet that you have filed a return in Australia but there is always the chance that the IRS would audit the return for compliance and within the next three years.
Hopefully the situation and the paths are clear now -- the choice is yours.
I do not believe I can provide any more info on this open board. If you have any specific questions etc. that that may not be of interest to the general posters/users, please consider PM me ( obviously no Personally Identifiable Information).
regards,
pk
