When the tax withheld is greater than the sum of income, I cannot e-file the return.

[David94]

Hi,

Based on the program's diagnostic, it appears that filing taxes electronically may not be possible due to the withholding tax amount exceeding the income. However, there haven't been any problems with e-filing thus far.

Among my clients, there's a missionary working abroad who reports as self-employed. The missionary organization supports 50% of the self-employment tax as W-2 wages and withholds both the supporting amount and his portion on Form W-2.

Since he's abroad, claiming a foreign earned income exclusion excludes all W-2 wages from income, resulting in no taxable income but a higher withholding tax amount compared to income.

In such a case, is it not possible to file taxes electronically? There haven't been any issues with e-filing taxes until last year.

Considering he lives abroad, paper filing would likely be inconvenient for him when it comes to tax reporting.

Does he have to paper-file then?

Thank you.

[Just-Lisa-Now-]

Ive got one person with Medicare Waiver income that has the same issue.   If I exclude all the income on the W2, it tells me I cant Efile because the withholding is too high, so I only exclude enough that it leaves $1 more income than withholding...EF's just fine and it doesnt make a dollars difference to any credits or taxability.

Could this workaround work for your situation?