Cannot remove Form 2555-S even though spouse needs to take the Foreign Tax Credit instead

[fjordlander]

I have read dozens of other similar questions without being able to resolve this problem. 

I am using TurboTax DESKTOP Home & Business Tax Year 2021. 

I am married filing jointly. We both have foreign earned income. I (taxpayer) am taking the Foreign Earned Income Exclusion and thus need to file Form 2555. My spouse is taking the Foreign Tax Credit and needs to file Form 1116 and NOT file Form 2555. 

I have gone through the interview many times and in the Foreign Earned Income section chosen the option to exclude my income only, not that of my spouse. When I run Smart Check, I get the following error:

Form 2555-S: Total Foreign Earned Income has a value for foreign earned income but dates for the foreign earned income exclusion aren't entered. Form 2555 must be completed including dates for bona fide residence or physical presence for the foreign earned income exclusion to calculate. To complete Form 2555, or to remove indicators that foreign earned income qualifies for exclusion on Form 2555 either on a W-2 or as Other Income on your return, return to Interview and search for 'foreign income'.

I have many times removed this Form 2555-S by going to Forms mode, and selected Forms > Remove Form 2555-S. It seems to remove, but then the error comes right back again and the form is back. 

Can anyone explain how to get TurboTax to stop adding this form for my spouse, or how to "remove indicators that foreign earned income qualifies for exclusion on Form 2555", using TurboTax Desktop?? As a reminder, I still need to file a Form 2555 for myself, but not for my spouse.

Thanks for any advice

[Critter-3]

To get rid of the form (weed)  you must get to the ROOT of the problem ... remove the root and the form will die automatically.

Switch to the forms mode ... click on the 2555 for the spouse and click on any income shown on that form to data source it ... delete the worksheet to delete the form. 

[fjordlander]

---

@Critter-3 wrote:

Switch to the forms mode ... click on the 2555 for the spouse and click on any income shown on that form to data source it ... delete the worksheet to delete the form. 

---

Thanks, but when I do that it also removes my spouse's income from my 1040 line 1 (wages, salaries). I need to be able to report the foreign earned wage income, but not file a Form 2555 for it. 

[Critter-3]

You must be missing a screen or 2 ... try again and read that section carefully.  

To enter Foreign Earned Income -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Wages and Income (Personal Income using Home and Business)
• Click on I'll choose what I work on (if shown)
• Scroll down to Less Common Income
• On Foreign Earned Income and Exclusion, click on the start or update button

Or enter foreign income in the Search/Find box located in the upper right of the program screen.  Click on Jump to foreign income

See this TurboTax support FAQ for reporting foreign earned income - https://ttlc.intuit.com/questions/1895445-do-i-need-to-report-foreign-income

If you are including the full amount of your foreign wages on your US income tax return and if you pay foreign taxes on these wages, you will be allowed an offset for these foreign taxes on your US tax return.

If you take a foreign tax credit, your US tax liability will be reduced by the amount of taxes that you would have paid if the transaction took place in the US (see this link Claim Foreign Tax Credit).

If you take a foreign tax deduction on Schedule A, you will be allowed to deduct the full amount of the foreign taxes paid but you will need to itemize (which could limit your ability to take the full deduction). The TurboTax software will help you determine which of these options will lower your overall tax liability.

Contact TurboTax support and speak directly with a TurboTax support agent concerning this situation if you still need help ...

What is the TurboTax phone number? (intuit.com)

See this TurboTax support FAQ for a contact link and hours of operation -https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number

[fjordlander · Accepted solution]

In the end I had to make a change to a worksheet in Forms mode, as you suggested, but not remove the whole worksheet. There was a "smart worksheet" for Wages, Salaries, & Tips Worksheet with a section for "Eligible Foreign Earned Income not reported on W-2 Smart Worksheet". I needed to leave my spouse's foreign wages there on the line "Wages from a foreign source". However, there was a checkbox that was checked down below saying the income was "eligible" for the FEIE. It is eligible, but we're not choosing the take the FEIE for that income. So I un-checked that box. That finally removed the phantom Form 2555-S that I couldn't delete, and allowed me to file. 

Thanks @Critter-3  for your advice.

---

@Critter-3 wrote:

Switch to the forms mode ... click on the 2555 for the spouse and click on any income shown on that form to data source it ... delete the worksheet to delete the form. 

---

---

[Critter-3]

There you go ... you had to get to the root of the issue.   If you switch back to the step by step mode you should be able to see that option to make.   May I suggest you save the current return with a different file name like "2021 form 2555 test"  then you can "play" with that file all you want without messing with the actual return so you can find the option in the interview for future tax years.