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Level 1
February 2, 2025
Question

TurboTax deluxe 2024 has the wrong tax due amount

  • February 2, 2025
  • 2 replies
  • 41 views

diag file token: 9059978115787161-66813933

 

I have a 2024 foreign income.  Even the entire foreign income can be excluded based on the bona fide test, my tax due amount is changed.  If I remove my 2024 foreign income, the tax due is correct.  

    2 replies

    Level 15
    February 3, 2025

    @  r41714 wrote:

    I have a 2024 foreign income.  Even the entire foreign income can be excluded based on the bona fide test, my tax due amount is changed.  If I remove my 2024 foreign income, the tax due is correct.  


    I'm a fellow user, so I can't use your token, but I've asked below for someone who may be able to assist you.   I see no one has responded to you so far, so I'll make a comment in the meantime.

     

    Are you saying that when you enter and exclude all your foreign income, the other income items in your return (i.e., the non-excluded income) have a higher tax rate?   The Foreign Earned Income Exclusion can raise the amount of tax of the non-excluded income because as I understand it (and I'm not a tax expert), the excluded income is applied to the lower tax bracket(s) first; i.e., it uses up the lower bracket(s) so that the remaining non-excluded income is taxed at a higher bracket rate.

     

    If you're using desktop software, go into Forms Mode and look at the Form 1040 Wks (worksheet.)   Just below Line 15, you should see a Tax Smart Worksheet that tells you how TurboTax is calculating your tax; i.e., on what additional tax calculation forms.

    Also, while in that Forms Mode, look for a Foreign Earned Income Tax Worksheet

     

    I've asked tax expert @DaveF1006  to respond here as well when he is next in the forum since he should also be able to explain that further, as well as look at your token if needed.  It's also possible that one of the other forum Tax Experts may see this thread and comment.

    DaveF1006
    Level 15
    February 3, 2025

    It depends. If I understand your question correctly, are you asking if the tax due on your account is correct and has the foreign income been excluded?

     

    In looking over your return, your foreign earned income is correctly excluded in line 8D on Schedule 1. If it is removed, your tax due amount would be over $10K. With the exclusion, it is a little over 4K. Keep in mind, these aren't tax refunds being reported but taxes due.

     

    I am not sure if this resolves your issue but reach out if we haven't addressed it.

     

     

     

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