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Earned Income in two different currencies

datajana — Thu, 27 Jan 2022 20:58:07 GMT

I received income in both US dollars and British pounds this past year. I know that I can use the IRS’s yearly average exchange rate, but how do I enter it? Do I combine it all? Enter them separately via another form?

I’m having to report all my income as earned income on a Schedule C for reference.

Re: Earned Income in two different currencies

DaveF1006 — Thu, 27 Jan 2022 21:29:20 GMT

You will need to enter all the income in US dollars. You will need to use a reliable source to convert British pounds to US dollars and then combine it.

Re: Earned Income in two different currencies

datajana — Fri, 28 Jan 2022 08:07:51 GMT

Would you happen to know of a source?

Re: Earned Income in two different currencies

TeresaM — Fri, 28 Jan 2022 13:36:54 GMT

For income, the IRS says, " The Internal Revenue Service has no official exchange rate. Generally, it accepts any posted exchange rate that is used consistently." If there are US tax payments made in foreign currency, then that will be the rate used by the bank on the day the conversion is made.
You can use IRS conversions at this site. IRS Yearly Average Currency Exchange Rates

Re: Earned Income in two different currencies

datajana — Fri, 11 Feb 2022 22:49:13 GMT

Thank you.

So do I add all of what I received for the year up, then use the yearly exchange rate before combining with what I earned in US dollars?

Sorry for the multiple questions. It’s confusing.

Re: Earned Income in two different currencies

JulieS — Fri, 11 Feb 2022 23:36:20 GMT

Yes, that is correct. Add up all you British pounds, convert then to US Dollars, then add the US dollars and report the total.