Which Forms To Fill Out? Form 1040? Form 2555? Form 2555EZ? Form 1116?

By: Pete
Date posted: 11.29.2011 (5:00 am) | Write a Comment  (1 Comment)

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I have to admit, I was surprised to see that I actually had a choice to make in regards to which form I will be submitting to the IRS. I was told in the answer I received from the IRS to fill form 1040 but also fill in either Form 2555, Foreign Earned Income or Form 2555-EZ, Foreign Earned Income Exclusion.
So what is the difference between the two? They will actually give the same results in most circumstances but the form 2555EZ is much easier to fill out as its name implies. What are the circumstances that would allow you to use the EZ form?:
-Revenues derived from employment (rather than self-employment)
-Either a citizen or a legal resident of the US
-Total earnings abroad don’t exceed the maximum foreign income exclusion for that year ($91,500 in 2010)
-Have earned wages/salaries in a foreign country
-Filing a full 12 month year
-No business or moving expenses for the year
-Cannot or choose not to claim the foreign housing deduction of exclusion
I seem to be fine for most of these but unfortunately not for the maximum as I will be reporting over $91,500 for my income in 2010. Thus, from what I understand so far, I will be filing out both Form 1040 and Form 2555. I also did a notice regarding Form 1116, Foreign Tax Credit, which I might have to allso fill out but I will need to start off with the two others before knowing for sure.
At this point, I’m not too certain about the impact of this maximum but I am assuming (and hoping) that it does not cause me to owe any money to the IRS.

Where do I find the appropriate forms?

On the IRS website, it is fairly easy to find the appropriate forms, for past years, they can be found here. I printed out both forms as well as the guide for form, 2555. I will be saving, but not printing the 179 page long guide for form 1040… ughh. I can tell you right now, this is the part where filing taxes seems like a 10 year process. But as I have done in the past, I will continue to write about my progress as I do hope to be able to get my 2010 forms sent in before year end.
In the next post, I will get started on Form 1040 and can hopefully make significant progress!

1 Comment »

  1. Comment by Daniel Malone — April 11, 2012 @ 3:03 pm

    I live and work overseas and have verified with the IRS that I qualify for the foreign earned income exclusion. My question is with regards to completing form 1040. On line 7 of the 1040 I put the total income earned. As instructed on line 18 of the 2555 EZ I put the same amount in parentheses on line 21 of form 1040 followed by a ‘2555 EZ’. This would make line 22 ‘total income’ 0. Do I need to fill out anything below line 22 since my taxable income is ‘0’(besides of course my signature and date)?

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