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Smojim2
New Member

If my gross foreign income is higher than the allowable amount for the foreign earned income exclusion, do I still add the total income on form 2555?

If my gross foreign income is higher than the allowable amount for the foreign earned income exclusion, do I still add the total income on form 2555, if I want to file for a tax credit on the non-excluded amount? What about the section for the 1116? Do I put the value of my total gross minus the foreign earned excluded income?

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2 Replies
LinaJ2018
Intuit Alumni

If my gross foreign income is higher than the allowable amount for the foreign earned income exclusion, do I still add the total income on form 2555?

In the Turbotax program, you will enter the entire gross foreign income starting with the Foreign Income section,   then continue to the Foreign Income Tax Credit section to enter the un-excluded amount, the program  will calculate the corrected excludable and taxable amount on the Form 2555, Form 1116 and Form 1040 based on the information you provide. 

To enter foreign earned income / exclusion in TurboTax online program:

1. After sign into your account, select Take me to my return 

2.  At the right upper corner, in the search box, type in foreign income and Enter 

3.  Select Jump to foreign income 

4.  Next screen, Did You Make Any Money Outside the United States? answer Yes 

5.    On screen, What Form(s) Was Foreign Income Reported On ? make your selection and follow prompts


To enter rest of the un-excluded amount under on a Form 1116 Foreign Tax Credit, here are the steps:

1.  At the right upper corner, in the search box, type in foreign tax credit and Enter 

2.  Select the 1st choice on the search results - Jump to foreign tax credit 

3.  Start with screen Foreign Taxes and select Continue  to follow prompts.

4.  On the screen, Choose the Income Type, select General category Income

5.  Next screen, select your country and follow prompts

6.  Please see attached screenshots of the following steps

If my gross foreign income is higher than the allowable amount for the foreign earned income exclusion, do I still add the total income on form 2555?

If your income is higher than the excludable amount and you are paying foreign taxes, you might be better off by not using the exclusion and only the foreign paid tax credit. You should calculate your return both ways and see which is better.

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