Filling Out Form 1040 (Part 2) – Income

By: Pete
Date posted: 12.12.2011 (5:00 am) | Write a Comment  (0 Comments)

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Last week I did start filing out form 1040 and had some expected questions about the civil status. I do expect quite a few more of these questions to come up. Now, I head down to the “Income” section, where I will be reporting my worldwide income. Luckily, all of my income was generated in Canada so that does simply things quite a bit in my opinion.

From what I understand, I only have to fill  out 3 different sections here. First off, I will be filling out line #7, which is my income paid out by my employer. I was paid in $CAD so I do need to convert that amount into $USD, you can see the average rates for the year on the IRS website. You could probably convert each amount into $USD using the rate at that time but since I do not expect to owe any money to the IRS, it’s not worth all the trouble, it would give me a slightly different revenue amount but also a different deduction amount. From what I understand both methods are ok to use.

So on line #7, I used the amount from my Canadian report, converted into $USD.

Then, I also had some dividend income, which had been reported in my Canadian tax report, which I will also convert and add to line #9.

Finally, I will also be using line #21 where I can report a deduction from line #21, you can see the example from the IRS website here. Next week, I will get to work on form 2555 (as I mentioned earlier, because my income is above the limit of $91,500 I am not eligible for the EZ version.

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