Taxable foreign earned income

[Possi]

My client spent from August to (present) in Jordan. He was a working student before leaving the country.
TTB discusses foreign earned income and exclusions of income, but how do I report the income if it is taxable? I don't see the answer in TTB.
He earned around $9000.00.
There is no report of the income. It's his word.
Is it reported on Sch C subj to SE tax?
On line 21 Other Income?

[Koss]

Foreign Earned Income

First, you'll need to make an independent determination as to whether the income is subject to self-employment tax.

If it is, then you can report it on Schedule C.

But it probably isn't.

Was he working for a US employer while he was over there? If not, then the income probably isn't subject to SE tax.

Was he actually self-employed, i.e., was he working as a subcontractor or as an independent contractor while he was in Jordan? If not, then the income probably isn't subject to SE tax.

But I'm not sure. I haven't looked at that particular issue in a while.

Assume for the moment that it isn't subject to self-employment tax, and that your client is also not expected to pay his share of FICA (i.e., 7.65% as opposed to 15.3%).

I'm going to try to answer your question about where to report the income.

It doesn't belong on Line 21.

If he was working, but he wasn't self-employed, then it's wage or salary income. It belongs on Line 7.

How, you ask? There's no Form W-2. How in the world can you get your software to put a figure on line 7 without a Form W-2? Or do you actually have to do the return by hand? And does this mean you can't file it electronically??

All I can say is there's probably a way to do it in your software. And I don't mean using some sort of kinky override that will throw all sorts of errors or hard edits that interfere with electronic filing. I think there's a way to do it correctly.

There is at least one other situation, which is actually a little more common, that requires an entry on line 7 when the taxpayer is not issued a Form W-2.

Taxable scholarships.

If you can figure out how to enter a taxable scholarship into your program, and get that amount to properly appear on line 7, then you're half way to an answer to your original question.

BMK

[David1980]

When efiling the info goes on the "FEC record" - your tax software may call it a variety of things. When it builds the efile image, it's the FEC record.

[Possi]

Ok thanks!

I will work on that in the morning. Thanks for helping me with this. He was working for a company and was not self employed. So, somehow I will get it on Line 7.

He is not living here, but his parents are. I think his mother has POA for him. I might do a paper return anyway, and have him sign and send it in. I'm afraid it will be confusing if I use his parent's US address and I have all that foreign income. If he stays there, I'll need the foreign address for the 2555 next year, for the exclusion, I imagine.

Thanks ever-so-much...
~possi