Not Excluding foreign Earned Income

Forum|Forum|4 years ago
December 17, 2021
1 reply
14 views

Hello,

I'm using Proseries Professional 2020. I have a client that lives and works in Germany. She is a US citizen and bona fide resident of Germany.

For TY 2021, she would like to see if it is more beneficial to not exclude her foreign earned income from US taxes and claim the foreign tax credit. As I go through completing 2555, I don't see a way to not exclude the income. I guess I could delete the Bona Residence test section, but I'm concerned that it may cause issues in the future if she chooses to exclude her income again.

Any help with this issue is greatly appreciated.

Thank you

ProSeries Professional

This topic has been closed for replies.

Best answer by TaxGuyBill

@Norman2001 wrote:

Where would I enter foreign earned income?

Also, I'd be concerned about not claiming the bona residence information.

On the 1040Wks, to the left of line 1, there is a blank space. Click it and it will open up a wage worksheet. There is a spot for foreign wages there.

Bona Fide Residence information is only for claiming the Foreign Earned Income Exclusion. If you are not claiming the Exclusion, that information should not be on the tax return.

However, use extreme caution. If I remember correctly, electing to NOT use the Foreign Earned Income Exclusion now will make it so the taxpayer can NOT claim it again for the next 5 years.

J

jeffmcpa2010

Level 10

Just a thought.

I have never prepared a 2555 unless I was intending to claim the exclusion. What happens if you just leave the 2555 out?

N

Norman2001Author

Level 6

Where would I enter foreign earned income? Also, I'd be concerned about not claiming the bona residence information.

J

jeffmcpa2010

Level 10

All of the returns I have done which had foreign earned income received a US form W-2, so I had that.

I guess your choices would be to complete a form 4852 Substitute for Form W-2, Wage and Tax Statement, or to report the income on the "Other Income" section.

Sign up

Login with SSO

Let's get you signed in

Login with SSO