Foreign taxes. So much fun!!!1

March 28, 2011 1:06 PM

How can I report a wee bit of foreign income on my US taxes?

Okay, I know similar tax questions have been asked before, but I'm literally losing my brain over here. I'm not sure why it's so complicated, and it's probably not really all that complicated, but for me, mmm.... yeah.

I'm trying to figure out how to report foreign income on form 1040A. I lived in the US up until October 2010 and then moved to France, so I have three months of French income from the French education system (I'll be going back to the US this May). I went through a couple of the free tax prep websites and all seemed fine, but I was told I couldn't e-file due to this foreign income. Okay, so I'll mail everything in, no problem. But here's the trouble: I have a W-2 from my US job, where I worked from January -- August 2010. I don't have a W-2 from my French job (I do have pay slips). On the 1040A, I have both incomes listed as one lump sum under "Wages, salaries, tips, etc." so the French income is not separately accounted for.

I looked into filing Form 2555: Foreign Earned Income, but apparently it's no good unless you meet certain criteria (living in a foreign country a certain number of days, et cetera), which I don't. I've heard of other people in my position filling out this form and running into lots of complications because of it. Others have listed their French income along with their US income (in a lump sum) and just included a note to explain the extra income (the IRS reads notes?!)

I just want to make sure I report this foreign income properly. I'm not sure if copies of my monthly pay slips would suffice, but that's an option. Also, if I'm somehow able to e-file, is it okay to not send a W-2 from my US job? I don't have it here with me but I could make it happen if necessary.

Good Lord, thank you.

posted by sucre to Work & Money (15 answers total)

Best answer: Are you perhaps a teaching assistant? (like myself) Today I received a form from my school stating "Declaration fiscale des traitements et salaires percus cours l'annee 2010." I have o idea how to make use of this form mind you, it might just be helpful on separating out the euros. Also, I believe you get an extension on your US taxes if you are living in another country when they are due (April 15th, which you are... if you're an assistant.)
I'll also recommended you to the Assistants in France forum, specifically this page and hopefully that should help, even if you're not an assistant here.

Best of luck, I feel your pain!
posted by raccoon409 at 1:25 PM on March 28, 2011

Response by poster: YES! I'm an assistant too... how funny! I also got that form (that's where I got my total money earned in 2010), and have looked carefully at the forum page on taxes, but I'm still lost. Ha ha. Good call on the extension... I'll look into in though I really just want to get this bleepin' stuff out of the way!
posted by sucre at 1:32 PM on March 28, 2011

Unfortunately, this is one of those things that's so easy to screw up that you're going to be better off going to a professional tax preparer than trying to do it yourself.
posted by valkyryn at 1:36 PM on March 28, 2011

Best answer: I am totally not an expert, but if you have any complications with your taxes, you probably need to use the 1040 long form, not the 1040A. You might look at that form and instructions to see if there is anything in there to help you.
posted by CathyG at 1:36 PM on March 28, 2011

Best answer: Did you try one of the more advanced (Home & Business or Deluxe) versions of TurboTax? You can start those for free, too, and see if they ask the right questions. If you tried that, though, then I don't know!
posted by limeonaire at 1:45 PM on March 28, 2011

The following documents may be relevant:

Publication 54
Form 2555
Instructions for Form 2555
Form 2555-EZ
Instructions for Form 2555-EZ
posted by DevilsAdvocate at 1:49 PM on March 28, 2011

Oops, sorry, you already looked at Form 2555.
posted by DevilsAdvocate at 2:00 PM on March 28, 2011

Did you pay taxes on the income in France? If so you might want to look at the Foreign Tax Credit page on irs.gov.
posted by IanMorr at 2:27 PM on March 28, 2011

Best answer: My mother, who has worked and lived in two countries for the last 20 years, swears by Turbo Tax for dealing with foreign income and tax credits.
posted by Zophi at 2:32 PM on March 28, 2011

If you have foreign earned income, you generally either exclude the foreign income via IRS form 2555 (well covered above) or report the income as any other income and then claim a credit (or deduction, but this doesn't make sense for you since you aren't itemizing your deductions) for the foreign taxes you paid on the foreign. See IRS publication 514, form 1116, and the instructions for form 1116 for information on the foreign tax credit. Turbo Tax Deluxe handles both foreign income exclusion as well as the foreign tax credit (or deduction) and will walk you through the steps needed to decide for which you are eligible.
posted by RichardP at 2:49 PM on March 28, 2011

Also, if I'm somehow able to e-file, is it okay to not send a W-2 from my US job?

For the last couple of questions: For the last couple of years I have used Free File online fillable tax forms. They won't step you through the process like TurboTax, so this is probably a solution of last resort in regards to e-filing. Using Free File, you don't submit an original W-2, but you DO have to copy information from your W-2 box-by-box into the web form.
posted by muddgirl at 2:52 PM on March 28, 2011

Ack, just saw this on Free File:

Does not support the efiling of returns with foreign addresses.

I suspect that this is a more general problem with e-filing. Turbo Tax confirms it:

If you are using an address that is non-military foreign, overseas, or a U.S. Possession (American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands and Puerto Rico), you must print and mail your return.

posted by muddgirl at 2:55 PM on March 28, 2011

In other words, you can't e-file because of your foreign address, not your foreign income.
posted by muddgirl at 2:58 PM on March 28, 2011 [1 favorite]

Best answer: have no idea on your question as a whole but as for the issue of the irs reading notes....yes! they do seem to read notes...i've had to include little notes about life twice so far!
posted by Tandem Affinity at 7:42 PM on March 28, 2011

Response by poster: For anyone who's curious, I ended up trying Free File, which seemed fine at first but my return was ultimately rejected (twice) due to funky error code 0134 (there was no error... I checked thoroughly). I then tried TurboTax and guess what... Zophi's mom is so right! It was super easy, and it went through the foreign income questions (I didn't pass any of the tests on Form 2555, so ultimately that form wasn't needed, but TurboTax gently guided me through it all). I just got an email that my return was accepted. HALLELUJAH! (Plus my state return was free to e-file as well, which is gold, and I also did the Property Tax Refund stuff along with everything else.)

Thank you all for the great advice and for leading me in the right direction! I was so close to losing it. My mind. Woop!
posted by sucre at 11:25 AM on March 30, 2011