TurboTax foreign income is also known as Form 2555 (Foreign Earned Income Exclusion) allows excluding a certain amount from your foreign income from US tax. If you want to know how to report foreign income TurboTax Online and TurboTax Desktop, stick through this guide till the end.
Here, we will teach you how to enter foreign earned income, foreign taxes paid, and foreign interest income in TurboTax Online and Desktop.
In this blog, we will enlighten you on which TurboTax version should be used for foreign income aligned with the procedure of entering foreign income in TurboTax.
Most users have been asking “which version of TurboTax do I need for foreign income”. Users are suggested to use a typical version of TurboTax based on the type of income they have.
For instance, if you are having Foreign Earned Income then you should use TurboTax Deluxe online edition or a higher version than that. On the other hand, if the income is from the US source then it is suggested to use the Free edition in the beginning. Later you can upgrade the version as per the requirement of your tax data.
Users are eligible for foreign income when they meet the criteria or requirements. In addition, you can exclude more than $100.800 in your foreign earnings from the taxable income. Moreover, you can get the credit or deduction for your foreign taxes paid.
However, you would not be able to get the deduction or credit for the taxes paid on foreign earned income if that was excluded by you. This happens because the housing or income is not being taxed. Now, let’s know what is the procedure of filing foreign earned income and foreign taxes paid.
TurboTax foreign income can be entered easily. All you have to do is update your income status in TurboTax. If you have no clue about that, let’s know how to report foreign income TurboTax in the following steps:
Note: If you are in “TT Home & Biz” then you can do the following:
This is how you can enter TurboTax foreign earned income. After you are done performing these steps, you can follow the instructions given on your screen to complete the process.
If you want to enter the foreign taxes paid in TurboTax then you can pursue the following steps stated below:
Note: If you are in “TT Home & Biz” then you can do the following:
Once you are done performing these steps, you can follow the instructions given on your screen to complete the process.
Users can include the amount of foreign interest income on the foreign bank account as Box 1 interest income. Remember that you need to enter the amount in USD.
Furthermore, if you have paid foreign taxes on your interest income then you can also take a Foreign Tax Credit of your paid tax on income as it is also taxed in the US.
If you want to know how to enter TurboTax Foreign Interest Income online then go through the following instructions:
Note: If you are using TurboTax Home & Business then you should click on the Personal tab.
Note: TurboTax Home & Business users can click on the Personal Income option.
This is how you can enter the Foreign Interest Income in TurboTax online and on the desktop version.
Foreign income is basically the sum of qualified dividends, unqualified dividends, and capital gains. You are eligible for this only if you meet the following criteria:
When you meet the above-mentioned expectations, you will be eligible for the QDI foreign income. Your TT will ask these details to proceed further so make sure you have all the details prepared.
In a Nutshell
We hope you have understood how you can apply for TurboTax foreign income. However, you have to take care of the TurboTax version you are using. For instance, if you are having Foreign Earned Income then you should use TurboTax Deluxe online edition or higher.
But if the income is from the US source then you can use the Free edition in the beginning. Later you can upgrade the version as per the requirement of your tax data.
Apart from this we have learned how to enter foreign earned income, foreign taxes paid, and foreign interest income in TurboTax. If you have any queries, feel free to ask in the comment box.
Also, there can be instances that your TurboTax software might have some errors. If you are facing certain error codes in TurboTax then check out the following guides to find some troubleshooting methods: