You don't need any form to report foreign earned income. Please select "A statement from my foreign employer (could be cash)" option to report income without form W2. (see attached picture).
You don't have to have a W2 form to report foreign wages. Often, employers simply give you a year-end statement or nothing at all. When going through Foreign Earned Income and Exclusion interview questions, you will have a choice to enter the income as W2, self-employment, or a statement from employer (could be cash).
To enter foreign income:
1. Federal Taxes
2. Wages & Income
3. Scroll down to Less Common Income
4. Select Foreign Earned Income and Exclusion
Good answer, that really helps. I have a question. How to convert foreign income into dollars properly. Which conversion rate should I use?
The IRS has no official exchange rate. You can use posted exchange rates that are used consistently.
The IRS does offer yearly average exchange rates at the following link.
This is helpful. Do we report gross or net income (i.e. amount that I receive)? I live in the US, but work for an EU company and taxes are VERY high, so the gross salary is unrepresentative and would put me in the higher bracket.
You report your gross foreign income (not net). You also report the foreign tax you paid, for which you will receive a credit (or deduction).
Another question - what if your foreign income is already included in your W2? I was on a project in Puerto Rico for several months -- how can I show that part of my income reported in my W2 was foreign? I also paid taxes on it so I believe I need to get the foreign tax credit.
@Ari18 All worldwide income is reported on the US return. You want a credit for the taxes already paid on the foreign income. Use form 1116 and fill out the portion of the wages earned outside the US and the tax paid.
You will want to claim the credit rather than taking the deduction, most likely. If you itemize, you can try it both ways. If you do not itemize, do not waste your time on the deduction. Please see:
Where do I enter the foreign tax credit (Form 1116) or deduction for 2019?
I received cash. It's saying I would have to mail in my return. Is that normal? Will I have to somehow show proof?
No, receiving cash as a form of payment as foreign income should not be a trigger to require you file by mail. Is there a specific message associated with the file by mail requirement?
I am getting the same message. Saying I must file by mail because I don't have income listed in line 7b.
I work in Canada, I don't get a W2. All I selected was foreign income. Should I still enter it in the W2 area? Would it be considered double income?
You need to input $1 in interest or dividends or something so that you have income and can e-file. It would not affect your taxes.
I'm sorry, I'm still a little confused. Do I actually have to attach a copy of the statement from my foreign employer when I e-file, or do I just write in the income? I ask because my employer is closed due to corona and I can't get a statement until the accounting department goes back to work.
No, you do not need to attach a statement from your foreign employer. You can go ahead and file your return with the information about the income.
If the IRS wants more information, they will send you a letter asking for the information.
It's not clear whether this is only for those filing 2555.
I cannot file 2555 for another year so I must file Foreign Tax Credit.
Can I still follow this advice in that instance?
It's easy to do this on paper (it was last year even if not entirely correct perhaps), but on TurboTax you have to put this income in somewhere.
Thanks,
T
I don't have a W2 so I filled it in as other foreign income from a letter from my employer or whatever.
But then when I try to claim the foreign tax credit it says this!
I very clearly seem to have done my Income correctly (without W2) and even made adjustments to put the same amount in the second box for such income... :(
Help!
You would need to go through the foreign tax credit section to enter your foreign tax payment. Here are the steps:
Hi! I searched for "foreign tax credit" and followed prompts; however, it takes me to "Dividend Income" and doesn't let me pass this step. I do not have dividend income, I just want to enter my employment income.
At this point, I'm considering entering my foreign income as self-employment income. Anyone have advice on this?
Hey guys... I need some help here please. Live and work in Europe and my one and only income I reported under FEI only. As soon as I put the same gross year income on my W-2 I owe $11k in federal taxes. Looking at my returns from the past two years I only ever had my FEI on my 2555 never on the W-2. Is this correct?
Simply put: Can I just delete my W-2 completely? There isn't one anyways ... just monthly pay stubs. Employer is also named on 2555 FEIE. Thanks!
Yes, delete the W-2 completely. The follow these steps to enter your income from your own totals:
Hello,
I have done exactly this, but the program will not let me e-file due to the fact that I don't have any income reported on the W2 section, even when I have deleted the W2 since I don't have a W2. And if I were to mail in my Form 2555, as TurboTax later told me I had to (since I couldn't qualify to e-file), how then do I attach it to a Form 1040 that the IRS requires if I don't have a w2?
Thanks
What if I live in the US, was paid from a company abroad (have no foreign tax credits), but don't have a W2/1099/paystub from my foreign employer? Should I put it under W2 income? Can the IRS "reject" it or something?
Hi there, I use www.xe.com/currencyconverter - click on View full USD to EUR chart - from there you can select how many years to see on chart. You can then see what the exchange rate was on the last day of the calendar year.