Form 2555

[macnamband1]

if you received income for a project done in the US for a Japanese company in 2019, and didn't travel to that country in that year, and did not receive a W2 or other tax form, how do you fill out form 2555??

[Critter-3]

If you lived in the US and worked in the US then you will NOT use a form 2555 ... the income and expenses go on a Sch C no matter where your clients are located even if they paid you in Yen.

[SusanY1 · Accepted solution]

You don't. Form 2555 applies only to income earned while outside of the United States.

Income that you earned while living and working in the US is not exculdable, and is taxable income to you.

You will report this as self-employment income subject to self-employment tax.

A tax form isn't required to enter income in this area of the tax software. You will simply enter it as Income in the self employment income and expenses section of TurboTax. 

You can also deduct expenses related to this income.  To deduct expenses requires an upgrade to Self-employed TurboTax if using TurboTax online, but an upgrade is not required if working in a program installed on your computer.

[macnamband1]

Thank you...  and no matter that no w2 or 1099 received, correct?

[Critter-3 · Accepted solution]

The IRS considers all income from SE to be SE income even if you get no tax reporting forms ... which is why you need to keep excellent records of both income and expenses.   

[MYC2]

Hi,

I am a US citizen and live in the US in 2022.  As a consultant, I got a payment$10,000 from China.  When I use Turbotax to check this entry, Form 2555 shows up. I do not know how to fill out form 2555.  How to N/A the form?

Thank you

[RalphH1]

The very accurate advice given to the original poster by Susan and Critter also applies to you, since you were in the U.S. while earning the $10,000. However, it looks like you’re onto this, and we just need to fix the entries which are telling the program to generate Form 2555. (And make sure it’s reported only on Schedule C, as regular U.S.-source income…)

Please try returning to the “Foreign Earned Income and Exclusion” section (“Federal Taxes”…”Wages & Income” [I’ll choose what I work on]…”Less Common Income”), and changing your answers to reflect no foreign income. This can be tricky, as the program shows you different things depending on what was previously done in the section.

If you’re not seeing a way to do this, I recommend going immediately to Plan-B: select “Tax Tools,” then “Tools,” then “Delete a form” in the “Tool Center.” And delete anything in the ensuing list which says “Form 2555…” and “Frgn EI Tax Wks.”

@MYC2, hopefully the 2555 error disappears after that, but if it doesn’t (or if you have any other lingering concerns), don’t hesitate to re-post!