Hi, I live half the year in the US (Washington State), but I was working for an American company in Europe. How do I file this? Thanks!

[DS30]

If you are a US citizen, then you will report all your worldwide income (in USD) on your US income tax return.

Since the income that you earned while working in Europe is considered foreign sourced income (even though it is paid by a US company) then you will report this foreign earned income (in USD) under the foreign income sourced section in TurboTax.

Based on the information that you provided, you will not be eligible for the Foreign Earned Income Exclusion. However, you will be able to claim a Foreign Tax Credit for any income that was taxed in a foreign country that also needs to be included on your US income tax return.

To enter foreign earned income information in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return") type "foreign earned income" in the search bar then select "jump to foreign earned income". TurboTax will guide you in entering this information.

To enter a foreign tax credits in TurboTax, log into your tax return (for TurboTax Online sign-in, click Here and click on "Take me to my return") type "foreign tax credit" in the search bar then select "jump to foreign tax credit". TurboTax will guide you in entering this information

You will have no state income tax filing requirement because WA had no state income taxes.

[fuchss17]

Hi, thank you so much for your helpful response! The one other thing I forgot to mention is that the US company I worked for is based out of Utah, so I did pay a state income tax. I would then need to file for it, is that correct?

[DS30]

It depends - If you worked remotely in WA for a company that is based in UT, then your income will actually be considered WA-sourced and the only reason you would file a UT state income tax return would be to get a refund.

In order to get the full refund of your nonresident state income tax withholdings, you will need to file a nonresident return but report zero "0" income from the nonresident state. You must mail in this nonresident state income tax return and include your state W-2 information. You will want to include an explanatory statement with your return stating your situation (that your nonresident state employer withheld nonresident state taxes from your wages in error due to a fact that you work remotely from WA.)

[fuchss17]

Hi thank you for your response. What makes this tricky is that I worked in Europe for a US company based in Utah. I did not work in Washington at all. I see on my W-2 that they taxed me for income tax and that's why I wanted to know how I should best approach this? My parents live in Washington which is why I use that as my main address, but I do not work there. Thanks!

[DS30]

same answer applies. If you worked remotely in Europe for a company based in UT, then the income will be considered foreign sourced income (because income is sourced where earned not where the company is located)
and you would still be able to file a $0 UT state return but state that you worked remotely outside the US.

[fuchss17]

Great! Thank-you so much for your help with this! I really appreciate it! My final question is when it asks  in the beginning if I live outside the US, should I click this box or not? I spent 8 months working for a tour company where my location/residence switched every few weeks (depending on where I was assigned to lead trips). The other 4 months, I was living in Washington (but not working). Thanks again! 🙂

[DS30]

Not sure the exact question you are referring to but If you currently live outside the US then click the box, if not then don't.

[DS30]

And you are very welcome for the help 🙂

[fuchss17]

Hey! I'm sorry to bring this up again, but as I started filing the Foreign Income, it told me that I applied for a foreign income exclusion. But this should not be correct.. I filled in the information stating when I was abroad and when I was in the U.S. or other countries during that 12 month period and I was outside of Europe for more than 35 days (it says you have to be there for 330 days). However, why would it tell me that I qualify for the foreign income exclusion??

[fuchss17]

After filing out my W-2 form (which details info from an American based company), it says that I have indicated my income was from a foreign source. I never said anything about it being from a foreign source, only that I worked abroad. It is from the U.S., which I stated when I filled in my W-2.. Sorry for all the questions, but it is so confusing... Thank you! 🙂

[DS30]

You can qualify for a partial foreign earned income exclusion.

[fuchss17]

Could it be because the income I made was less than $20,000??

[fuchss17]

It should it was giving me the full refund.

[fuchss17]

Sorry, said not should. 🙂