Do I include foreign income in the estimated federal tax payment that goes together with Form 4868 for an extension?

[Anonymous]

Hello 
I moved to Japan mid-year in 2021 and began working and earning income in Japan. 
I need to file Form 4868 "Automatic Extension of Time to File". Once Form 4868 is filed, I have a new extended deadline to file taxes until October 15th. Then I need to file my 1040 (and all the extra stuff) + Form 2555 "Foreign Income Earned" together before October 15th.
However, even after filing Form 4868, I still need to wait 1 full year of being physically present in Japan from the first day of my arrival (to pass the Physical Presence Test). Form 2555 is used to exempt me from paying U.S. income taxes on the money you earned in Japan after 1 year. Therefore I can't file my 2021 taxes until around after mid-year 2022 (my arrival date in 2021) but before October 15th, 2022. 

My question is, I want to file Form 4868 asap, but I need to make an estimated federal tax payment when filing Form 4868 (for an extension). I have my estimated tax payment amount ready (income + other money earned from the US), but I want to know if I need to include my foreign income earned (in Japan) in the total of the estimated federal tax payment that goes together with 4868?

I am guessing that maybe the answer is no? Since later when I (literally and officially) file my 1040 + Form 2555, the effects from Form 2555 will exempt me from paying US taxes on my foreign income from Japan for 2021.

In short, when I file Form 4868 and make an estimated federal tax payment with it, should my estimated payment take into account foreign income earned or not? Since when I do file my taxes after Form 4868, I will also file Form 2555, thus exempting me from paying US income taxes on the money I earned in Japan.

I ask this because while inserting my data on TurboTax to file 2021 taxes, without the foreign income, I have to pay a lot of taxes. (which well it is what it is) (I did this to get the estimated amount due when filing Form 4868).  But when I insert my foreign earned income into the system, suddenly instead of having a large amount of taxes due that I must pay, suddenly it says that I am getting a refund. Obviously, if I really owe taxes and must pay a large amount, I would rather not make the mistake of instead saying that I require a tax refund when filing Form 4868. 

Can anyone give me some advice?

[DanP0428]

As a US citizen you include all income earned worldwide when determining the amount to pay with your extension.

[Anonymous]

@DanP0428 I think I understand what you are saying. 
But my main concern is this. When filling out (not filing) my 1040 and all my income earned in the US for 2021, Turbox Tax said I owed over $1000 ish. Obviously, that is NOT a small amount, and the interest penalties would be huge if I don't pay this when filing Form 4868. 

The issue is this, when I inserted my "earned foreign income" into TurboTax, AND fill out the prompts to get the exemption of paying US income taxes on my Japanese income, suddenly my giant thousand dollar tax bill that I owe turns into a tax refund. (of course I can't literally file my taxes until after a 1 year period of my arrival if I want the tax exclusion of Foreign Income)

If I were to fill out Form 4868 now, I wouldn't pay any estimated taxes, because my new estimated taxes due turned into a refund. So I don't know what I did wrong and am scared

[DanP0428]

Sorry, someone with more foreign tax knowledge than I have will need to help with this.

[ThomasM125]

You may have an earned income or similar credit that is causing your tax due to decrease. A tax credit reduces your tax and can increase as your income increases when you make under a certain amount of income.

Your earned income credit would be listed on line 27(a) of your form 1040. You may also see other credits on lines 27 to 30. I suggest you look at your form 1040 and those lines in particular to see what changes when you add your additional income.

You can view your form 1040 while working in the online version of TurboTax by following these steps:

While working on your return in the Federal section of TurboTax:

   1.  Choose the Tax Tools icon on your left menu bar

   2.  Tools

   3.  View Tax Summary

   4.  Choose the Preview my 1040 on your left menu bar