I received income in both US dollars and British pounds this past year. I know that I can use the IRS’s yearly average exchange rate, but how do I enter it? Do I combine it all? Enter them separately via another form?
I’m having to report all my income as earned income on a Schedule C for reference.
You will need to enter all the income in US dollars. You will need to use a reliable source to convert British pounds to US dollars and then combine it.
For income, the IRS says, " The Internal Revenue Service has no official exchange rate. Generally, it accepts any posted exchange rate that is used consistently." If there are US tax payments made in foreign currency, then that will be the rate used by the bank on the day the conversion is made.
You can use IRS conversions at this site. IRS Yearly Average Currency Exchange Rates
Thank you.
So do I add all of what I received for the year up, then use the yearly exchange rate before combining with what I earned in US dollars?
Sorry for the multiple questions. It’s confusing.