How to report earned income with paying SE

[Pacun]

US citizen living in SPAIN sin 2018, earned $18K in spain. I want to report HH because she has a child and I want to get additional child tax credit. If I use ex-line 21 and enter 18K, no additional child tax credit.

Thank you in advance.

[Matthew in the PNW]

I'm heading out for the day.

Ex-line 21?

Child info isn't throwing a diagnostic?

[Lynn EA USTCP in Louisiana]

Use the foreign earnings worksheet , which should flow to the line for wages . 

[Pacun]

Title should read: How to report earned income WITHOUT paying SE

[DANRVAN]

Are you sure he qualifies for EIC?

No EIC if filing form 2555 for foreign earned income exclusion.

[DANRVAN]

6 hours ago, Pacun said:

US citizen living in SPAIN sin 2018, earned $18K in spain.

Sounds like form 2555 should apply.

[Lynn EA USTCP in Louisiana]

If the earnings are $18K the HOH standard deduction would wipe that to zero amd leave the TP eligible for child related credits , without using form 2555. Take FTC a for taxes paid to Spain, if any. 

[DANRVAN]

2 hours ago, Lynn EA USTCP in Louisiana said:

without using form 2555.

I agree Lynn, EIC could out weigh the benefit of the exclusion but was wondering if form 2555 was the reason EIC was not allowed.

 

[Lynn EA USTCP in Louisiana]

56 minutes ago, DANRVAN said:

I agree Lynn, EIC could out weigh the benefit of the exclusion but was wondering if form 2555 was the reason EIC was not allowed.

 

Yes, if all wages are excluded via 2555 then there will be zero wages upon which to calculate the EIC.

[Pacun]

EIC is not in play here. I need to enter earned income in a way that is not SE taxed and is able to be considered for addition child tax credit.

I will try Form 2555 and see what happens.  I expect this person to get $1,400 refund.

 

[Lynn EA USTCP in Louisiana]

Pacun, have you tried to use the foreign earnings worksheet (FECWKST)for this? No SE tax will apply with this worksheet. 

[DANRVAN]

2 hours ago, Pacun said:

able to be considered for addition child tax credit.

I will try Form 2555 and see what happens. 

You cannot take ACTC and also file form 2555.  

Are you sure you understand what is involved for filing taxes for a U.S. citizen working abroad?

Form 2555 is not something to experiment with.

[Sara EA]

Just finished a client who worked in the UK all year and all earned income was excluded on 2555. (He did have a few k US investment income.) He got the first but not the second EIP, and the program was calculating a recovery for the second. Based on his foreign income, he made too much to get either.  I looked it up and believe it or not, his reduced US income made him eligible.  My point is that every credit has its own quirks, and in our job we learn something new every day (or hour). 

[Pacun]

15 hours ago, DANRVAN said:

 

Are you sure you understand what is involved for filing taxes for a U.S. citizen working abroad?

 

Maybe not. But I know the end result.

I will find a way for this person to file as HH, not pay SE taxes, and to get $1400 refund.

And as mentioned by someone else... we learn something new every day. If we wait to be master on something before we dive in, we would not have filed our first 100 returns because among those 100 returns the we filed a long time ago, there were a couple that were above out head.

 

 

[joanmcq]

Use the FECWKS.  Report the income, there is no SE tax and do NOT check the box to take it to the 2555.