Foreign Earned Income

jacey2012 · Post by **jacey2012** » Mon Jun 18, 2012 2:42 pm

I have questions about our US 2011 income tax return. Both my husband and I are US citizens and we filed married-filling jointly. My husband lived and worked in US and I lived and worked in Canada in 2011. We have one dependent who lived with me in Canada during 2011. My husbandâ€™s income was $100,000 US and my Canadian income was $47,000. I met the physical present for the whole year of 2011 and was able to exclude my income. So I am thinking, only my husbandâ€™s income would be taxed. However, I used online tax software to calculate our tax payment, I donâ€™t know why the tax calculated was higher than IRS 2011 tax table. What is the exact steps to exclude my income? I think I must be missing some steps, please help!

nelsona · Post by **nelsona** » Mon Jun 18, 2012 3:05 pm

You should have a 2555 form generated for your return.

Because your husband has unexcluadable income, and it is more than the standard deduction amount, your total tax is not calculated using the tax table, it is a blended tax rate. It does not take your income of f the total, it takes your income off both the taxable and non-taxable prtion of your joint income, resulting in a slightly higher tax.

Your can run a return using foreign tax credit instead, form 1116 to see if it worked out lower, but I suspect that 2555 is the best way.

jacey2012 · Post by **jacey2012** » Mon Jun 18, 2012 8:42 pm

Thank you for your answer. My another question is, since my daughter and I lived in Canada in 2011 the whole year, can my husband still claim both spouse and dependent exemptions on married-filling jointly return?

nelsona · Post by **nelsona** » Mon Jun 18, 2012 8:45 pm

Of course.

nelsona · Post by **nelsona** » Tue Jun 19, 2012 8:38 am

... you would both need SSNs or ITINs for the claim. incuding your daughter wil get you $1000 credit.