Can I e-file with Form 1116 but no Form 2555?

You may be able to delete the form 2555 to resolve your problem by following these steps in TurboTax:

1. Tax tools (on the left menu bar)
2. Tools
3. Delete a form

Find form 2555 in the list and delete the form.

Thanks! I know there's a trick in standalone TurboTax, but unfortunately I'm using TurboTax online this year and I don't know how to delete a form manually online.

Here is how to delete a form in turbo Tax online.

1. Log into Turbo Tax
2. Go to tax tools
3. Tools
4. Delete a form
5. Delete the form you are wishing to delete.

I see what you mean, but in my version of "TurboTax self-employed 2020" tax tools are nowhere to be found. The left column only contains two options: Tax home and Documents. Did TurboTax remove the online version's ability to delete a form?

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@ zuxyzuxy

 wrote:

 in my version of "TurboTax self-employed 2020" tax tools are nowhere to be found. The left column only contains two options: Tax home and Documents. Did TurboTax remove the online version's ability to delete a form?

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If the only tabs in your left menu column are Tax Home and Documents, that means your return is not open.  You have to open your return interview to have a full complement of left menu tabs.

If TurboTax thinks you were finished, your return interview may be closed.   To open it back up, use this method:

At the Tax Home page, look for a link "Add a State."   That doesn't really add one, but opens the return back up.

Thank you for your detailed instructions! I did manage to delete Form 2555. Unfortunately even after that I still couldn't e-file and got the same error message :(

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@ zuxyzuxy

 wrote:

Thank you for your detailed instructions! I did manage to delete Form 2555. Unfortunately even after that I still couldn't e-file and got the same error message :(

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Your original comment mentioned 2555-S, so that sounds like a spouse's 2555.  Did you at one point indicate a spouse had foreign earned income?   Are you sure you removed all instances of the problem 2555 when you went to the forms list?

If so, I would log out of TurboTax, delete your browser cache, close and reopen the browser, go back to TurboTax, then see if it lets you efile.

If it won't let you, look at the forms list again and see if the 2555 is being regenerated.

I'm not a tax expert, but if problem continues, then hopefully one of the 2 TurboTax tax experts above can further advise. 

Thanks! Yes it's my wife who has foreign earned income.

I made sure there was no more Form 2555 that could be deleted, and it was not regenerated. However, TurboTax insisted I fix the form when I tried to e-file

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@ zuxyzuxy 

wrote:

Thanks! Yes it's my wife who has foreign earned income.

 

I made sure there was no more Form 2555 that could be deleted, and it was not regenerated. However, TurboTax insisted I fix the form when I tried to e-file

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I just ran a couple of scenarios, and think I know what your cause may be..

By any chance, was your wife's foreign earned income entered in the W-2 interview?    If so, I think I may know what may be flagging the return for more info related to a 2555 even though you deleted the 2555, and how to get around it.

Even if the foreign earned income is NOT W-2 income, I can hopefully still tell you what you might be able to do to clear everything related to a Form 2555 and solve the error.

So, in summary, please state if the wife's foreign earned income was reported in the W-2 section, or if it was  foreign wages (not on a W-2) which were entered directly into the FEI interview.   Or was it another type, such as self-employment income or a partnership K-1 entered in the FEI interview?

Hello,

No my wife doesn't have a W-2. All her income in 2020 was foreign sourced and was entered directly in the "Foreign Earned Income and Exclusion" part as "a statement from my foreign employer (could be cash)"

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@ zuxyzuxy 

wrote:

No my wife doesn't have a W-2. All her income in 2020 was foreign sourced and was entered directly in the "Foreign Earned Income and Exclusion" part as "a statement from my foreign employer (could be cash)"

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OK, then try this. By the way, I'm a fellow user, not a tax expert.  So I can't comment on any tax aspects of it.

Since you originally still had a Form 2555 in your forms list when you asked this forum question, I don't think you completely finished that FEI interview, because right at the end there is a screen that specifically asks if you want to try to exclude the income.  When you say "No, I  know I don't qualify to exclude my foreign income" (if that is your situation), it then asks if you want to delete Form 2555 and provides confirmation screens as it deletes the Form 2555.  Then it may also ask to delete Form 2555, page 3.   So if you still had a Form 2555, I don't think you got that far.

When you finish confirming that you want to delete the Form 2555 and Form 2555, page 3, then that interview is finished, and you should be back at the Your Income summary screen.

So if you walk through that FEI interview again all the way to the end, it may reset something.   As you do it, it may regenerate a Form 2555 in the background, but as I said, the last screens when you say "No, I know I don't qualify to exclude my foreign income" (if that's your situation,) then it will say it's deleting the Form 2555.   See these 2 images which are at the end of that interview.

Did you see and answer these 2 screens previously?

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And the next screen is this one (although yours will say 2555-S instead of T.)

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Then it may ask you if you want to delete the Form 2555, page 3.

Then you'll be back at Your Income summary screen.

I'm hoping that it will now let you efile.

Thank you! I never encountered that particular question but instead was asked whether my wife took these exclusions before (she did), and whether they were subsequently revoked (they were), and whether we got IRS permission to choose the exclusion again (we didn't). Finally we were told we couldn't take the exclusions and the FEI interview ended.

Still couldn't e-file :(

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@zuxyzuxy wrote:

Thank you! I never encountered that particular question but instead was asked whether my wife took these exclusions before (she did), and whether they were subsequently revoked (they were), and whether we got IRS permission to choose the exclusion again (we didn't). Finally we were told we couldn't take the exclusions and the FEI interview ended.

Still couldn't e-file :(

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Sorry you're still having trouble.  If you went through that interview again, did you go back to "Delete a Form" and make sure the Form 2555 had not been regenerated?

I didn't see those screens you mentioned since that's a much more specific scenario.  I simply told it that I knew I didn't qualify, and it deleted the Form 2555.

Your situation sounds more complicated.  Also, did you transfer 2019 data into your 2020 return?  If so, that might also account why you were seeing different screens.   In any case, I don't have anything else to suggest as a fellow user.   It's still possible someone else might post in this thread.

If you want to talk to TurboTax Support, here's how to phone them. 

Hours are 5AM-9PM Pacific (8AM-12 Midnight Eastern) 7 days/week.

You can use this contact form to get a phone number or it may schedule a callback.
https://support.turbotax.intuit.com/contact

Thanks all the same! I made sure no Form 2555 was regenerated after I deleted it and I didn't import any 2019 data. I'll try to get in touch with TurboTax support over the phone.

After spending over an hour with a specialist I figured out a way to work around the issue; if you don't/can't take the foreign earned income exclusion, just don't bother to do the FEI interview. Instead, enter the foreign income in the foreign tax credit part directly. That way Form 2555 is completely removed from the system.

Congrats!  I'm glad you were able to solve it. Thanks for reporting back.  Good luck.

Great to know that you finally got your problem resolved. I patiently read through the entire thread. 

QUESTION : How did you report the foreign income by avoiding 2555?

I'm in a similar situation. Trying to claim FTC (foreign tax credit) by filing form 1116 instead of filling in form 2555.

However, in order to claim the FTC, the foreign income needs to be reported under Wages/Income section, and the only way to do that seems to be through the FEIE (Foreign earned income and exclusion) interview, which triggers the 2555 scenario. Now, if I go ahead and manually delete the form 2555 (using the desktop app) I run into an e-Filing error that instructs me to complete form 2555.

You can choose not to exclude your foreign income, as you enter your foreign income there is is screen asking Whose Foreign Income Would You Like to Try and Exclude? (This is an example if you filing Married Filing jointly) Here you can say neither of us, or if it just you, indicate you do not want to exclude your foreign income. 

After you make this entry, go to tax tools>tools>delete a form>delete 2555 and the form should disappear in your list of forms. If you are using the desktop version, go to forms>select 2555>delete. 

@tbudd

@DaveF1006 

I've tried this procedure, but the Form 2555 still shows up in the review as a problem. It's asking for dates, but there's no place to enter any dates. 

I have even deleted the Form 2555 (one for me and my wife), they're not on the list, but it still shows up as a problem when I try to file. 

One issue I noticed is that when I try to re-do the "foreign income" questions, the system automatically selects "Both of us" when asking whose income to exclude. I change it to "Neither of us", but when I finish the whole process again, those 2555 forms are still there and causing a problem. 

If this is persisting, I am going to recommend an alternate method of reporting your foreign income and this should work.

1. Delete your foreign income from the Foreign Income and Exclusion section. Wipe it clean !!
2. Go to tax tools>tools>delete a form>delete form 2555 and any worksheets that may be associated with it.
3. After doing this, repeat step 2 just to make sure that Form 2555 doesn't appear.
4. Now go to:
5. Federal>wages and income
6. less common income>show more
7. Miscellaneous Income, 1099-A, 1099-C>start
8. Other reportable income>start
9. Answer yes to the first screen
10. Next will be a dialog box asking for the description of the income. Type in  Foreign income earned in XXX country and then the amount. At this point, you can make two individual entries or one combined entry.
11. To claim a Foreign Tax Credit;
12. Click on federal> Deductions and Credits at the top of the screen
13. Select I will choose what I work on
14. Scroll down to Estimates and Other Taxes Paid 
15. Select Foreign Taxes and then select start

That's very very helpful. I tried your way to file the foreign earned income. It perfectly resolved the issue. You saved tons of our efforts and time! Really appreciated!

@DaveF1006 

Thanks for sharing the elaborate steps. (I'm using the desktop version of TT)

I did exactly what you said starting with deleting the 1116 forms that had gotten added initially, and doing everything from scratch. I did verify that there was no 2555 or 1116 remnant in the forms.

However,  the return fails the Smart Check validation under federal taxes with the following error even though there's nothing really related to 2555 visible in the forms.

I think it's pure dumbness of the TT software which is probably safe to ignore and go ahead with the e-filing?

@RabbitFamily , are you using the web portal or the desktop software?

I am using desktop software.