All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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lwl
Pioneer
Posts: 1
Registered: ‎04-18-2017
Accepted Solution

Expat who moved back to the US - Form 2555

I moved from Hong Kong to the US in late September 2016, and had only worked and earned income in Hong Kong (I stopped working prior to moving to the US and did not earn any income in the US). Basically all of the income I earned in 2016 was earned and taxed in Hong Kong, and falls under the maximum threshold for FEIE (Form 2555, I qualify based on the physical presence test).

 

I am using Form 2555 on H&R Block and I entered my days eligible (270 out of 365) so it shows pro-rated income even though I earned all my income in Hong Kong during those 9 months. Since I also have to declare the total income I earned on the "Foreign Compensation not shown on a W2" form, the software is calculating the difference between that amount and the pro-rated amount and saying I owe taxes.

 

Is this correct? It doesn't seem right and I did pay Hong Kong taxes, but Form 1116 says not to include the income already stated in Form 2555... Please help, thanks!!!

 

 

Pioneer
Posts: 2
Registered: ‎12-26-2017

Re: Expat who moved back to the US - Form 2555

Which software did you use?  I'm a new expat trying to figure out which H&R block product to use.  Hope that you got your question answered!  

Associate (Pioneer)
Posts: 10
Registered: ‎01-08-2018

Re: Expat who moved back to the US - Form 2555

Hi, lwl,

 

Welcome to H&R Block Community!

 

As a US citizen or Resident Alien, you need to pay income tax for your global income. In order to claim foreign earned income exclusion (FEIE), you need to meet either bona fide residence test (be a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year) or physical presence test (live in foreign country for at lease 330 full days). Here is the reference for the two tests: https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-can-i-claim-...

 

Since neither tests apply to you, you should not claim the exclusion using form 2555. However, you can claim foreign earned income tax credit using form 1116. Since you do not claim the FEIE, you can use all your income to claim the credit. Hopefully, that helps. Feel free to let me know if you have any further questions!

 

Leah,

Tax Research Specialist

Associate (Pioneer)
Posts: 10
Registered: ‎01-08-2018

Re: Expat who moved back to the US - Form 2555

Hi, eneutuch,

 

Welcome to H&R Block community!

 

Both Deluxe and Premium versions of the software supports form 2555 and form 1116. Thanks for choosing H&R Block.

 

Leah

Tax Research Specialist