If I got a 1099 misc from a US company for work in Japan can this be excluded?

[palmerberean1]

I live in Japan and qualify for physical presence to exclude foreign earned income. I got a 1099 Misc from a California company for work I did for them while in Japan. Why is this taxed?

[PhyllisG]

Self-employment income can be excluded from income if it meets the foreign earned income requirements.  However, a business net income of $400 or more is still subject to the United States self employment tax.

The Internal Revenue Service explains the computation with the following example:

"You must take all of your self-employment income into account in figuring your net earnings from self-employment, even income that is exempt from income tax because of the foreign earned income exclusion.

Example:

You are in business abroad as a consultant and qualify for the foreign earned income exclusion.  Your foreign earned income is $95,000, your business deductions total $27,000, and your net profit is $68,000.  You must pay self-employment tax on all of your net profit, including the amount you can exclude from income."