1099 NEC and Lohnsteuerbescheinigung

[Ephe]

Hello,

To preface, I am a US citizen living in Germany. I have received two tax documents from the same employer for the same income. One is the 1099 NEC and the other is the Lohnsteuerbescheinigung, which is the equivalent of a German W-2.  When I input the 1099 NEC it does not allow me to deduct the taxes taken on the German tax form nor does it allow me to file the NEC under foreign earned income exclusion. But when I go to the foreign earned income exclusion portion and enter the German W-2 information under "statement from foreign employer" it adds them both up displaying the information from both form on the total calculation when it should only be there once. 

I am unsure how to proceed to file these properly or if I should even be filing both at all.  Any guidance on this would be great. 

[RobertB4444]

You have two options.  You can enter the German form in order to take the foreign earned income exclusion.  Or you can enter the 1099 and then enter the foreign taxes paid and take a foreign tax deduction.  Either should result in a zero dollar tax return.

I would enter the 1099 and then the foreign taxes, personally.  The IRS received a copy of the 1099 so it is best to enter that form on your return.

Foreign taxes are entered in your federal return under 'Deductions and Credits'.  Scroll down to 'Estimates and Other Taxes Paid' and click on 'Foreign Taxes'.  Enter what you paid to Germany here.  That should solve the problem.

@Ephe 

[Ephe]

I appreciate the response.  Issue is when I file the German one I do not owe anything, but when I file to the 1099 NEC it jumps up to a couple thousand dollars asking me to itemize the deductions so I get a little concerned and just wanted to do it the simple way, but if the 1099 is the safer route I will mess with that more. 

Thank you again!

[MarilynG1]

Since the 1099-NEC is considered payment for self-employment income (reported on Schedule C),  you can take deductions against the income (as well as claim the Foreign Tax Paid).  In the Foreign Tax Credit section, you will need to report the amount  and type of income you paid the foreign tax on.  You could choose  'General Category Income'. 

Here's Self-Employed Business Expenses by Business  and Claiming the Foreign Tax Credit  info you may find helpful.

@Ephe