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Did you go through the interview for foreign earned income? In the Search box type "foreign earned income" (without the quotes), then click the link that says "Jump to foreign earned income."
As stated above, you do want to be sure that you go through the foreign earned income interview. Here, you will have to repeat the amount of income that you wish to exclude to identify it.
You also mentioned that your wife has her own business. That will subject her to self-employment taxes which are not covered by the foreign earned income exclusion. However, there is a separate Totalization Agreement between the US and Australia that can exempt your wife from that tax provided she has a certificate of exemption obtained from the social security administration. If you do not have this certificate HERE is information on how you can request it.
TurboTax doesn't have direct input for the totalization agreements in the interview or step-by-step mode but you can make adjustments to the self-employment tax by following the directions found HERE.
Returns claiming that exemption must be mailed in order to include the required copy of the exemption certificate.
@recce36f4 , while generally agree with the comments / questions from my colleagues @rjs and @SusanY1 , I think we need more info from you for a definitive answer:
(a) need to know whether one or both of you are US person ( Citizen / Green Card ) and are you planning to file together ( Married Filing Joint);
(b) wife has a business -- does this mean that that is her total world income or does she also have some US active and/or passive income; How about your US and/or foreign income;
(c) is this your first filing with foreign income; when did you establish your foreign tax home;
(d) if you are also employed in Australia ( or foreign wages ) are you employed by a local entity or a branch or US govt.
Please note that while W-2 ( if any ) info is entered under wages in TurboTax personal income tab, foreign earnings i.e. Foreign Earned Income eligible for exclusion must be entered under the proper heading --- personal income --> next select " I will choose what I work on "; from the resulting drop down list , near the bottom under " uncommon incomes" select " Foreign Earned Income and Exclusion" and go through the interview process. You will fill out the form 2555 which checks whether you qualify for exclusion ( must meet physical presence test ).
Please answer the questions I posed and I will circle back and help.
pk
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