Foreign Income Where To Report

[baileybones]

This might seem like a crazy question, but I can't find where to enter my foreign income on form 1040. I moved to Canada in June 2006 and am just now completing my U.S. 1040 form. Turbo Tax allows me to enter my exclusion on form 2555, but I can't seem to find where to enter the actual foreign income. Doesn't make sense to enter an exclusion but not enter the actual foreign income itself. Thanks

[nelsona]

You enter all income in the same lines as if it were earned in US. For software purposes, you might have to create some fake 1099 and w-2s, but other than that, don't let the software run you.

[baileybones]

Thanks Nelson. I did just that. Under Other Income there was a line for Wages not already reported. There it said to enter wages not reported on a W-2. Example - Foreign Wages. It worked great.

One last question - I entered my exclusion using the FEIE 2555 and it still gave me my child tax credit of $2000.00 (2 children). I thought if you did a FEIE then you couldn't use the child tax credit. I thought you had to use the FTC 1116 to be able to use the credit. Am I wrong or do you think the software is wrong?

Thanks again

[nelsona]

The reason USC's living in Canada need to use 1116 to the the child credit is that they are living there the ENTIRE year and thus are excluding ALL their wages.

You moved in 2006, so your pre-move US wages, which you could not exclude using 2555, were sufficient to get you the credit.

Next year you will need to use the 1116.

[baileybones]

All makes sense now. Your explanation very clearly states what I have to do to complete the forms. This year 2555. Next year 1116.

Thanks again Nelson. You provide invaluable information to me and others like me. I very much appreciate the time you take to respond.