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Foreign Earned Income

Forum|Forum|5 years ago
April 21, 2021
2 replies
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Hi All,

I am preparing a tax return for a US Citizen who worked in Germany for the whole year and he made $24,553 with withholding tax of $$1,767. So I started with 1040 form and start filling form 2555 then I jumped to 1116 form which I thought I would use it to claim his withholding, and his Rent other than that there is nothing else, no interest or dividend no income here in USA,

My questions are: at this point I have an error for not having any income because 1040 has all Zeros,

and I think because the return is not eligible for efiling, Second is there anything that I am missing in finishing this return?

Third is if this return supposed to be filed with this small income?

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Best answer by DTNY07

Yes you have to file it. Is the $24,553 USD? Assuming it is, there is no need to calculate the Form 1116 activity. That is because he would have the foreign earned income exemption and that is more than $24,553. But that is only if he is a bona fide resident of Germany. Or if he passes the physical presence test in Germany.

As far as all zeroes. Just put $10 of interest. Then you can e-file and there is no tax due on $10 interest

D

DTNY07Answer

Level 6

Yes you have to file it. Is the $24,553 USD? Assuming it is, there is no need to calculate the Form 1116 activity. That is because he would have the foreign earned income exemption and that is more than $24,553. But that is only if he is a bona fide resident of Germany. Or if he passes the physical presence test in Germany.

As far as all zeroes. Just put $10 of interest. Then you can e-file and there is no tax due on $10 interest

M

Mustapha RatibAuthor

Level 4

Yes it is USD amount, I used the average method to convert.

so in this case there will be no taxes due or refund due and that’s the reason behind not using the 1116 form since there is nothing to reduce as taxes, right?

D

DTNY07

Level 6

Yes, that is correct

M

Mustapha RatibAuthor

Level 4

Hi All,

One Last question on this matter, what is the average price charged for this kind of Tax Return?

Only One Foreign earned income FORM, and nothing else and preparing his federal and State for that.

only 2555 form involved here.

Thanks

Mo

D

DTNY07

Level 6

You have to decide that. Everyone is different, depends on how long you've been doing this. Where you are located (I am in Brooklyn, NY and prices are generally higher in new york city compared to other parts of the country)

M

Mustapha RatibAuthor

Level 4

I am a neighbor, live in CT, and before I used to work for HR Block so prices are part of the system, now that I am in my own I don't know what is the average price out there, especially that HR are little pricee.

my other problem as of now is that when I printed the client copy the form 2555 is not there, so if I efile this return it wouldn't have the 2555 form which is the most important form there. please advise

Thanks

Mo

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