If you meet certain requirements, you may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction.
If you are a U.S. citizen or a resident alien of the United States
and you live abroad, you are taxed on your worldwide income. However,
you may qualify to exclude from income up to an amount of your foreign
earnings that is adjusted annually for inflation ($101,300 for 2016).
Form 2555 (Foreign Earned Income Exclusion) calculates the amount of
foreign earned income and/or foreign housing you can exclude from
taxation. Form 2555-EZ is a simplified version of this form.
Here's how to add – or remove – a Form 2555 or 2555-EZ from your return:
- Open your return.
(To do this, sign into TurboTax and click the orange Take me to my return button.)
- Do a search for foreign income, and then click the "Jump to" link in the search results.
- Continue through the foreign income section, answering questions as you go, until you reach the screen Do you want to try and exclude your foreign earned income? (if single), or Whose Foreign Income Would You Like to Try and Exclude? (if married).
- Answer Yes (to add a 2555 or 2555-EZ – we'll figure out which one you need) or No (to remove it), click Continue, and follow any on-screen instructions.
Tip: The -T or -S suffix after the 2555 stands for taxpayer or spouse, respectively.
