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posted Jun 12, 2021 5:32:12 AM

Last year I filed form 1116. Can I stop filing form 1116 although I have foreign earned income and live abroad? I will still declare the foreign earned income.

the foreing earned income is small and does not affect my taxes. Also, I cannot get credit for it because it is excluded from taxation in the US due to a tax treaty, and I do not want to file 2555. Thanks

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Level 8
Oct 6, 2021 3:49:13 PM

Your question has two parts:

 

Form 1116

You do not have to file Form 1116 if you do not want to claim a US tax credit or deduction for taxes paid to another country.

 

If TurboTax prompts you to fill out the form, say NO to the question Did you pay foreign taxes in 2020 or have credits to use from a prior year? You’ll find the question on the screen Foreign Tax Credit. Do this even if you paid foreign tax, but do not want to claim the credit.

 

Form 2555

You can also opt out of filing Form 2555. Not filing Form 2555 means you’ve chosen to NOT EXCLUDE any foreign earned income.

  1. Type foreign income in Search in the upper right
  2. Select Jump to foreign income
  3. Say YES to Did You Make Any Money Outside the United States? And CONTINUE
  4. Enter your foreign income and continue until you come to Would You Like to Try and Exclude Your Foreign Earned Income?
  5. Say No, I know I don’t qualify to exclude my foreign income. TurboTax will not create Form 2555.