Skip to main content

Legal

Tax & Accounting

Trade & Supply

Risk & Fraud

News & Media

Books

Developers

Foreign

Calculate the deductions for foreign-earned income

Form 1040 and related forms and schedules show foreign-source deductions for figuring adjusted gross income. Form 2555, Page 3, Part VIII, shows the amounts distributed to the excluded income. You enter information about deductions on the
2555-2
 window in the
Foreign Exclusion
 folder.
You can use the following types of deductions in this calculation.
  • Moving expenses
  • Employer-equivalent self-employment tax
  • Keogh/SEP/SIMPLE
  • Form 2106 expenses reported on Form 1040, Page 1
  • Business expenses claimed on Schedule C
  • Business expenses claimed on Schedule F
  • Partner's share of foreign earned income and operating expenses
Use the activity's allocation code to distribute related self-employment items. A reduction ratio is applied to the amounts for foreign income to determine the amount that's definitely related to the excluded income. The ratio is foreign-earned income and housing exclusions over total foreign earned income.
The Form 2555, Page 3, Part VIII calculation is part of the Form 2555 Deductions Allocable to Excluded Income Worksheet. "See Wrksheet" prints to the left of Form 2555, Line 44. You can submit this as the required Form 2555, Page 3, Part VIII calculation.

This article applies to:

  • Product: UltraTax CS
  • Return type: 1040 Individual
  • Subject: Foreign income
Chat now

error-icon

Triva isn't available right now.

Check out the support page for our phone number and hours

error-close