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Subject Author Date
Foreign Earned Income & 1099-misc glessor 02-25-2007
Posted by glessor on February 25, 2007, 12:01 am
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 I am a US citizen but spent the entire year of 2006 outside
of the US. I made income of about $25,000 from online
advertising/affiliate programs which I manged while living
here in Africa. I understand that regardless of the source
of the funds or whether it is paid by a U.S. employer or a
foreign employer, as long as I was physically present at my
foreign tax home the entire tax year, I do qualify for the
Foreign Earned Income Exclusion.

The above incomes were reported on Form 1099-Misc with my US
address which I still maintain. The problem now is I am
filling my taxes using TurboTax, and when I enter the income
in the 1099-Misc section, the Foreign Earned Income
Exclusion is not applied.

Can I just use the section of TurboTax that deals with
Foreign Earned Income Exclusion, and enter the amounts
there?

G

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Posted by parrisbraeside@yahoo.ca on February 26, 2007, 12:35 am
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 gles...@gmail.com wrote:

> I am a US citizen but spent the entire year of 2006 outside
> of the US. I made income of about $25,000 from online
> advertising/affiliate programs which I manged while living
> here in Africa. I understand that regardless of the source
> of the funds or whether it is paid by a U.S. employer or a
> foreign employer, as long as I was physically present at my
> foreign tax home the entire tax year, I do qualify for the
> Foreign Earned Income Exclusion.
>
> The above incomes were reported on Form 1099-Misc with my US
> address which I still maintain. The problem now is I am
> filling my taxes using TurboTax, and when I enter the income
> in the 1099-Misc section, the Foreign Earned Income
> Exclusion is not applied.
>
> Can I just use the section of TurboTax that deals with
> Foreign Earned Income Exclusion, and enter the amounts
> there?

Beforehand, did you pay taxes on that income to the country
where you are living? You can't take a Foreign Earned Income
exclusion unless you paid taxes on it in your foreign tax
home.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by L K Williams on February 27, 2007, 3:55 pm
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> gles...@gmail.com wrote:

>> Can I just use the section of TurboTax that deals with
>> Foreign Earned Income Exclusion, and enter the amounts
>> there?

> Beforehand, did you pay taxes on that income to the country
> where you are living? You can't take a Foreign Earned Income
> exclusion unless you paid taxes on it in your foreign tax
> home.

With all due respect, I disagree. If you do not pay tax to
the country in which you reside, you MAY not be able to
claim the exclusion under the bona fide resident rules.
However, there is no such requirement under the physical
presence rule.

If you are subject to the tax laws of the country of
residence but are not required to pay tax under some
provision of that law, you may still qualify for bona fide
residency. Not too common but not really that unusual,
either.

As long as you are outside of the US for the requisite 335 days, you
can claim the exclusion under the physical presence rule. It doesn't
matter whether or not you pay any taxes -- it doesn't matter how many
different countries you may have been in -- all that is necessary is
that you be outside the US.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by shedges on February 26, 2007, 12:35 am
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For foreign income, enter the 1099MISC amount on Form 1040,
Line 7 and then complete Form 2555. The result of the
foreign income calculations on the form is that your foreign
income exclusion is usually entered as a negative amount on
Form 1040, Line 21. The foreign housing deduction is a
"write-in" amount on Form 1040, Line 36. Turbo Tax should do
this automatically for you if you meet the tests to exclude
your foreign income from US taxation. If Turbo Tax does not
support Form 2555, get the most current update online.
Otherwise, hire a tax professional in your area if you're in
the states.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by A.G. Kalman on February 26, 2007, 12:54 am
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glessor@gmail.com wrote:

> I am a US citizen but spent the entire year of 2006 outside
> of the US. I made income of about $25,000 from online
> advertising/affiliate programs which I manged while living
> here in Africa. I understand that regardless of the source
> of the funds or whether it is paid by a U.S. employer or a
> foreign employer, as long as I was physically present at my
> foreign tax home the entire tax year, I do qualify for the
> Foreign Earned Income Exclusion.
>
> The above incomes were reported on Form 1099-Misc with my US
> address which I still maintain. The problem now is I am
> filling my taxes using TurboTax, and when I enter the income
> in the 1099-Misc section, the Foreign Earned Income
> Exclusion is not applied.
>
> Can I just use the section of TurboTax that deals with
> Foreign Earned Income Exclusion, and enter the amounts
> there?

The exclusion is not automatic. You need to complete Form
2555.

--
Alan
http://taxtopics.net

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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