Foreign Earned Income Exclusion

[shackacctsvcs]

I have a client who has foreign earned income, which a portion is being excluded. After the exclusion, their taxable income remaining is $30,553. ProConnect is calculating a tax liability of $7,332, but if I do the math based on the tax table, it should be $2,433. What is strange is that their marginal and effective tax rates are exactly the same (24%). Is their a rule that exists, where the remaining foreign income gets taxed at a flat 24% rate? I could not find this anywhere in the IRS tax code.

Taxable Income	$30,553
Up to $10,275 excluded
Amount Taxable	$20,277
Tax @ 12%	$2,433.24

[sjrcpa]

The remaining income gets taxed at the bracket that would apply if there was no foreign earned income exclusion.

The software should provide a worksheet.

[shackacctsvcs]

Perfect! Thanks for the explanation.

[sjrcpa]

You're welcome.