How to Pay 1040 for 2023 with 2555 Foreign income exclusion

[j-desormiere]

Hello there! I moved to Europe in Nov 2022, I am not planning on coming back to the US before the summer of 2024. I am suppose to submit my first 1040 in April for the 2023 tax year, can I submit a 2055 with it even though I have not spend a year abroad yet? And do you guys know of any service or software that allows to send the prepayments 1040 for 2023, I can't find it in Turbotax?

[JohnB5677]

To answer your first question about the foreign tax exclusion.  

You do not qualify for tax year 2022.

• You must be "A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months."
• You do not qualify for this (YET).
• If you file for an extension. This will give you until October 16th, 2023, to file your 2022 taxes.  You could accumulate the 330 days, but it would not be in a 12 month period.
• You can use the IRS’s Interactive Tax Assistant tool to help determine whether income earned in a foreign country is eligible to be excluded from income reported on your U.S. federal income tax return.
• Foreign Earned Income Exclusion - Physical Presence Test

You will qualify for the exclusion in 2023, so you may not have taxable income.  

However, you can Make Payments Directly to the IRS from this website.

[j-desormiere]

Thank you John,

Just to be clear here. I already filled my 2022 taxes as a US resident. I am talking about the prepayment for 2023 on the 1040, as I became a contractor on January 1st. I might be mistaking but my understanding is that I need to pay taxes quarterly, then file at the end of the year. So I am seeking information on the first pre-payment on April 2023, for the 2023 tax year, I saw that it was through a 1040 form that needed to have the 2555 attached, but I might be mistaking.

Regards,

[JulieS]

Quarterly payments, also known as estimated taxes,  are made using Form 1040-ES. You can print 1040-ES vouchers and mail in a check or money order, or you can make payments online. 

You can use TurboTax to help you estimate the amount of tax you need to pay each quarter. 

1. Open your 2022 tax return and select Federal on the left side menu.
2. Click on Other Tax Situations.
3. Expand Other Tax Forms and find Form W-4 and Estimated Taxes, click Start or Revisit to the right.
4. Answer No to the question Do you want to change your W-4 withholdings for 2022?
5. Select Review Now on the next screen.
6. On the screen Review Your Estimates for 2023, answer Yes.
7. Answer the questions about your 2023 filing status, expected income, and deductions.
8. On the screen titled, Which Method? Select one of the 2023 options, not the first option.
9. When you come to the Print Vouchers? screen, answer Yes and the program will include your 2023 1040-ES payment vouchers when you print a copy of your return later.
    

Since you will be in Europe, online estimated payments can be made using Direct Pay or a card payment (fees apply to card payments). Click here to get started. Select "Estimated" as the reason for the payment. 

[j-desormiere]

Thank you so much, this is very helpful.

So my last clarification, should I include the 2555 to the 1040-ES? Even though I only left in Nov 2022, for the first estimated payment on April 2023, knowing that I won't be back in the US before 2024?

Regards,

[JulieS]

No, you don't need to include any tax forms with your estimated payments, other than than the 1040-ES voucher (and that is only for mailed payments). 

If you make all your payments online, just be sure to select "Estimated"  and 2023, so that the payment is applied correctly. 

[j-desormiere]

Thank you!

The issue here, is that I wouldn't be able to benefit from the foreign tax exemption if I do not include the 2555, correct?

[JohnB5677]

Yes, you do have to file the 2555, but not for tax year 2022.

"When to claim the exclusion(s).

The first year you plan to take the foreign earned income exclusion and/or the housing exclusion or deduction, you may not yet have met either the physical presence test or the bona fide residence test by the due date of your return (including the automatic 2-month extension, discussed earlier). 

If this occurs, you can either:

Apply for a special extension to a date after you expect to qualify, or

File your return timely without claiming the exclusion and then file an amended return after you qualify."

Instructions for Form 2555 (2022)