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Do I need to claim income from teaching at an international school in Costa Rica? If so, where do I enter it if I don't have a W2?
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Do I need to claim income from teaching at an international school in Costa Rica? If so, where do I enter it if I don't have a W2?
Yes, if you are a US citizen or green card holder, you need to declare your worldwide income every year on your tax return.
If you did not pay foreign tax on your wages, ignore the foreign tax credit instructions below.
If you did not receive a W-2 for your foreign wages, then you need to enter the foreign wages in the foreign earned income exclusion section of TurboTax.
To enter your foreign income, type in foreign income in the search box at the top of the screen. Click the Jump to foreign income link. This is where you need to enter your foreign wages.
You may be able to
exclude part of your foreign earned income if you were not in the US for
more than 35 days in ANY 12 month period. So if you only had 35 US
days from March 2018 to March 2019,you could take a partial exclusion for 2018.
The full exclusion for 2018 is $103,900. If you have been living and
working overseas for an entire calendar year, you can claim foreign earned
income for the entire year if you are a US citizen.
If you do not qualify for the foreign earned income exclusion, the software will still keep track of the foreign wages not reported on a W-2. You should then go to the foreign tax credit (I'll give instructions below) section of TurboTax to enter your foreign tax.
If you do not qualify for the foreign earned income exclusion, then go to the foreign tax credit section to see if you qualify for a foreign tax credit to help offset double taxation.
To enter your foreign taxes, type foreign tax credit in the search box at the top of the screen. Click the Jump to foreign tax credit.
To report your Costa Rican tax paid on your wages for foreign tax credit:
- Click on Deductions & Credits
- Scroll down to Estimates and Other Taxes Paid
- Scroll down to Foreign Taxes
- Click 'Yes" you paid foreign taxes
- Click through the screens regarding foreign interest and dividends
- Click yes that you have reported all your foreign income already in TurboTax
- Click that you want to take a credit
- Answer question about the Simplified Limitation Election
- Choose income type for wages - it will be General catagory income
- Add Costa Rica as the country
- Enter description -Costa Rican wages
- Enter Income amount that you
previously reported in TurboTax in the foreign earned income section
- Enter your taxes you paid on your foreign wages in the box "Other income"
- Continue through ALL the foreign tax credit screens
until done.
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