No, you don't need to qualify for the foreign earned income exclusion in order to file foreign earned income. Quite the opposite; you must report foreign earned income regardless if you qualify or not.
However, TurboTax may prompt you to file an extension, if, for example you don't qualify for the exclusion now due to your time spent outside of the U.S., but you will qualify later in the year, when you do file an extension.
Either way, you must report your worldwide income. You can enter foreign income
without any forms.It has special data entry and it accounts for all
situations of foreign income. Program will determine if you qualify for the exclusion in this interview...To enter worldwide/foreign
income in Turbo Tax:
- Federal Taxes
- Select Wages and Income
- Scroll
down to Less Common Income
- Select Foreign Income and Exclusion - Answer
“Yes” to “Did you make any money outside the United States?” and follow
the interview questions. You will be asked to enter income from a U.S
company, a foreign company, self-employment income, housing allowance,
income from a Form W-2, 1099-MISC, schedule K-1 from a business or simply
cash income - check the box A statement from
my foreign employer (could be cash).
If you do not and will not qualify for an exclusion (even with extension), please visit Foreign Tax Credit if you paid any foreign tax on the income:
- Federal Taxes
- Deductions & Credits
- Scroll down to Estimates
and Other Taxes Paid, select Foreign Taxes
NOTES:
The
foreign earned income exclusion is $101,300 for 2016. An
individual generally qualifies for the foreign earned income exclusion if his
tax home is in a foreign country and one of the following tests is met:
1. Bona fide residence test. The individual must be a resident for an
uninterrupted period that includes an entire tax year. It is generally a more
difficult test to meet. Your actions
must be “resident-worthy”, the IRS will determine if you meet the test based on
your intentions, purpose of the trip and the nature and length of your abroad
stay. You cannot have any future plans to return to the United States, as well.
2. Physical
presence test. The individual must be physically present in a foreign
country or countries 330 full days during a period of 12 consecutive months.
Generally,
to meet the physical presence test, you must be physically present in a foreign
country or countries for at least 330 full days during the 12-month period. You
can count days you spent abroad for any reason. You do not have to be in a
foreign country only for employment purposes. You can be on vacation time. You do not
meet the physical presence test if illness, family problems, a vacation, or
your employer's orders cause you to be present for less than the required
amount of time.
