From what I understand, Australia and USA have totalization agreement and thus because I pay tax in Australia and pay into the social taxes here, should be exempt. However, Turbo Tax is requiring that I do not enter my self employment income other than profits earned under the Foreign Earned Income Exemption section, but also stating I need to enter it as a K1?
Is your business incorporated ? Does it file an 1120S and issue you a K-1?
Hi, no i don't believe so, I work as a private practice therapist and also earn commission as an independent distributor for an MLM company... both are under one Australian Business Number for tax purposes and I pay tax as applicable in Australia. Thank you for your help
If this is YOUR business then you will report this as foreign earned income and either take the exclusion or the tax credit on the income you pay australian taxes on ...
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