Foreign Earned Income Not Showing Up

[hanco]

Hey everyone,

So I entered an amount for the "Foreign Earned Income & Exclusion" section but when I clicked Done and Turbo Tax redirected me to the 2019 Income Summary page, the amount that I entered is still set to $0. I've tried re-entering my foreign earned income multiple times but each time, Turbo Tax keeps putting in $0 for my foreign earned income and it's incredibly frustrating.

Does anyone know how to solve this issue?

[pk]

@hanco . which version of TurboTax are you using ( version and type--on-line/ downloaded / windows etc. )?  Can you confirm that you are US citizen/Resident and that your tax home is foreign ( which country), that you are employed by a local entity or self-employed?  Did TurboTax prompt and asked to fill out form 2555 ?

You message is labeled as from On-line Free edition which is not capable of dealing with complex situations like  foreign earned in come and exclusion--therefore my questions.

[hanco]

I'm using the online version and yes I'm a US resident with self-employed income in another country. However, I don't qualify for the exclusion so I didn't have to fill out form 2555. TurboTax actually deleted that form after they found out that I wasn't qualified for the exclusion.

I've reported my foreign income just fine on my 2018 tax return but I'm not sure why TurboTax isn't showing the amount I inputted for my foreign income and just typing in $0 for that section.

[pk]

@hanco , in the section on "foreign earned income and exclusion" you report  ONLY income earned while your tax home is/was foreign. If you your self-employment income  ( even from foreign sources )  but the work was performed  with a US tax home ( generally your work place ), then you report the income  ONLY on schedule-C.  If you had to pay  foreign taxes on this "foreign " income then you have to use form 1116 to ameliorate double taxation.  In any case this portion is often controlled by  tax treaty between US and the foreign  country.

Is your tax home in the USA?  Did you perform the work at location in a foreign land ( where you stayed for a significant  period of time)?  Was all of this in 2019?  Which country?  Are you US citizen/Resident(Green Card)?   Were you taxed by the foreign country on this self-employment income ?

[hanco]

I'm a US resident with a business in a foreign country. This is all for 2019 and no I didn't live in the foreign country during that time. I just stayed in the US. So I was already taxed by the foreign country on that self-employment income but still need to report that income on TurboTax for my worldwide income. But the amount I entered in is not showing up on the Foreign Income Section of TurboTax. I=

[pk]

@hanco , please see my earlier reply -- you have to report the self-employment on schedule-C.  Then since you have paid  taxes on this income ( need to know which country, because this is valid  ONLY for countries with tax treaty with the USA ), you have to file form 1116   ( in the search box " paid foreign taxes" and  jump to first entry ) and in there show the income that you had from foreign operation  and the taxes you paid  to the foreign  taxing authority.

Also note that you will have to pay Self-Employment Tax on the net income ( at 15.3% on most of it )

You do not enter this foreign income in "foreign Earned Income and exclusion" -- this will not show once the  form 2555 is eliminated.

TurboTax is operating correctly.

Is there more I can do for you ?

[hanco]

Oh okay that makes sense. I just have one more question.

On the foreign taxes section, it asks "Did you pay taxes on income you made while working outside the U.S.?". Well I didn't make my foreign income while working outside the US so I clicked No but then it said that I didn't qualify for the Foreign Tax Credit. So how would I input the foreign taxes that my business paid to the foreign country?

[pk]

@hanco , if the taxes were paid on INCOME i.e. net income tax, then you just have to tell the system that you worked there and see what the software does.  Because it is trying to distinguish between active and passive income I think.

However, if the tax was like VAT or sales tax or similar ( i.e. per sale / transaction  and not net income of the business ) then you should  report this under taxes/ licenses on schedule-C.

Hope that makes sense