Taxes paid to foreign country as a self-employed expat

[Jonna21]

HI,

I am self-employed and live abroad (Sweden).  Where do I enter the taxes that I have paid to the Swedish government in Turbotax? I am looking to know which specific section I should enter it at.  

I have entered it under "Personal", Deductions & Credits" - "Tell us about any tax withholding that you haven't entered yet.   Is this the correct spot?

I really would appreciate the help

Jonna

[pk]

@Jonna21 , as an expat, you have multiple options to ameliorate the effects of double taxation:

(a) Exclude your foreign earned/self-employed  income to the yearly maximum from US taxes  --- FEIE.  This is done under Foreign Income Exclusion --- under personal income, go down to near the botttom of the drop down-list of incomes.  Note that self-employed income  you need to fill out a schedule-C and make sure that is the income that is reflected as your foreign income.

(b)   Foreign Taxes on any excluded  income  (or if you choose to not exclude income), is eligible for  foreign tax credit on form 1116 --- this is done under Deductions & Credits

(c) Foreign taxes  can also be deducted if you  choose itemized deduction  ( SALT limit of US$10,000 applies ) -- also under Deduction and Credits.

Note that if you are not participating in US Social Security & Medicare , you need a certificate of participation from Swedish Equivalent  and send to the IRS for forwarding to SSA.

Given the above , how can I help you ?

[Jonna21]

Hi and thank you!

However, it's still not crystal clear. 

My husband who works for a Swedish company is easy to enter under Personal / Foreign Income.  But since I owe my own company, should I only enter this also under Personal / Foreign Earned Income? Or should this not be entered under Business / Business Income and Expenses. Maybe I have even entered the actual income incorrectly?  

Please advise

Jonna

[pk]

@Jonna21 , for self-employed / sole proprietor business and for US purposes, you enter  gross income and the associated expenses  ( allowable under US tax laws) on Schedule-C  -- this is under business income.  Schedule-C will create  a net taxable income -- eventually shown on Schedule-1 and then on to form 1040 as business income but will also create a Schedule-SE  ( Self-Employent Tax ate 15.3%  covering the Social Security and Medicare tax --- called SECA).   This income is also eligible for Foreign Earned income Exclusion and/or Foreign Tax credit.  You just have to make sure  ( try the forms mode and perhaps a calculator) that the income is correctly included on your 1116 or 2555 --- each of you should have one of these forms., if you are filing jointly.

BTW -- you are aware  that because you are abroad your filing date ( without extension ) is June 15th but the payment settlement date is still  April 17/18th.

Is there more detailed help needed -- please feel free / welcome to either post here or PM me

pk