I just did a MFJ, US citizen's return in which there was $90,000 of foreign earned income which was all excluded and 30k of LT cap gains and 14k of interest and dividends of which $9,000 was qualified. There were also 4 exemptions and itemized deductions of about $16000. So taxable income is about $14,000. The tax came out to zero. So the new system for computing tax where there is foreign income being excluded can lwoer as well as increase the tax.
-
-
Try again
Without the foreign income, there would be tax owed, right? $44,000 AGI and about $29,000 for deductions and exemptions. Is there a foreign tax credit involved here? Perhaps there are also foreign taxes paid on the dividends? What is the adjusted gross income and taxable income shown on the 1040? -
No foreign tax credit
Thereturn showed a taxable income of 14k. There are no foreign tax credits involved. The foreign earned income exclusion tax worksheet just shows a zero tax . My software company says they have received mutliple calls on this but it is correct. Zero tax on $14k of taxable income.Comment
-
really zero?
This sounds identical to our situation. For the last several months I've been operating under the assumption we must add the Qualified Divs/Cap Gain Worksheet result ($10k) to the result on the Foreign Income Tax Worksheet ($0). But now I'm thinking that's incorrect; that it's only the Foreign Income Tax Worksheet that matters and the $15k in non-excluded taxable income we had is also swept away. Very strange, indeed.Originally posted by Kram BergGold View PostComment
Comment