Line 44 is higher than amount computed from IRS tax table

[AA1]

I am struggling to understand why the amount on line 44 is higher than what I calculate using the IRS tax table for 2015. Line 43 is $141,106, which calculates out to approximately $26,864 tax owed. But line 44 shows $33,631. Lines 47 through 63 are empty.

We are claiming the foreign income exclusion for a few months, but I do not understand how it affects my tax rate.

Could you please explain? Thanks

[DoninGA · Accepted solution]

See IRS Form 1040 instructions page 43 for the worksheet to calculate tax if foreign earned income exclusion is claimed - https://www.irs.gov/pub/irs-pdf/i1040gi.pdf#page=43

Foreign Earned Income Tax Worksheet. If you claimed the foreign earned income exclusion, housing exclusion, or housing deduction on Form 2555 or 2555-EZ, you must figure your tax using the Foreign Earned Income Tax Worksheet

The TurboTax program calculates your tax based on the IRS Foreign Earned Income Tax Worksheet—Line 44

[TaxGuyBill]

In a 'nutshell', the Foreign Earned Income Exclusion 'uses up' your lower tax brackets, so your income that is taxable is in the higher tax brackets.

[SweetieJean]

Good concise explanation, Bill!

[AA1]

Thank you all for your help. Very useful!

[JohnC2]

Are you referring to IRS's Publication 15 (Circular E)?  If so, it's not directly comparable to your 1040 tax return.

It's better to look at Line 7 of your 1040, not line 43, as that is your income from W2s.  Line 43 is your taxable income after you've entered in your various deductions.