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ron613
New Member

Where can I indicated that foreign income is not eligible for foreign earned income exclusion?

I have various sources of foreign earned income:  some eligible for the foreign earned income exclusion and some which is not.   At one point, I saw a checkbox in one of the turbotax worksheets, where I can indicate (by hand) whether a salary source is eligible or not eligible.  I cannot find that worksheet now.  Does anyone know which turbotax worksheet would have that information?

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KarenJ
Intuit Alumni

Where can I indicated that foreign income is not eligible for foreign earned income exclusion?

You need to enter your foreign earned wages in the foreign earned income exclusion section of TurboTax.  Enter foreign income in the search box at the top of your screen and click the Jump to link.

Your foreign wages and foreign housing costs are eligible to be excluded from the US tax if you meet one of the two tests.  You can find more information in the link below.

Your allowable foreign wages for the exclusion or the foreign tax credit are wages earned in a foreign country.  Any wages that are earned in the US during a US business trip are not allowed to be claimed as foreign wages.  If you have $100,000 as base salary paid in 2018 and you were overseas all year except for 10 US business days, assuming 240 workdays in 2018, you can exclude 230/240 * $100,000 = $95,833 of wages as foreign.  In TurboTax you will need to enter the amount sourced to US workdays as a negative adjustment from your total wages.

According to the IRS, some of your wages are sourced on a geographical source.  These are fringe benefits such as your compensation components for foreign housing, children's education, local  transportation and hardship pay and foreign taxes paid by your employer.  These items are considered 100% foreign.

All other components of your wages are sourced on workdays.  Except a bonus that relates to a prior year is sourced by prior year workdays.


https://www.irs.gov/publications/p54



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