My wife and I lived in Spain teaching English for part of 2017, and made a combined income of about $9,000 during our time there. Do we have to pay tax on this income?

[aaronpyost]

We both worked as ESL teachers for companies that pay taxes in Spain, but the companies do not provide a W-2 as they are based in Spain. We moved back to the US in July 2017, her total US income was $8,500 and I didn't start working until 2018. How do I declare these funds on my return, and is there a way to avoid having to pay on the $9,000 earned in Spain?

[Vanessa · Accepted solution]

Yes, you will need to pay taxes on this income, the US taxes income earned worldwide by U.S. Citizens. There really is not a way to avoid paying taxes on the income earned.  If you paid taxes on the income in Spain, you can enter the information and possibly take a foreign tax credit. 

To enter the income you earned in Spain, you will do the following:

1. Click Federal
2. Income and Expenses
3. Scroll down and click Show More next to Less Common Income
4. Click Start next to Foreign Income and Exclusion

[aaronpyost]

Thanks so much for the thorough response!