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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Pioneer
Posts: 1
Registered: ‎08-10-2014

Form 2555 and AGI miscalculation

All,

 

With Taxcut 2013 fully updated, I am seeing some funny errors with actual AGI and related forms that calucluate off of AGI.

 

1) TUITION CREDIT - several of the IRS options (American Opportunity Credit, etc) are based on AGI, and my AGI after a 2555 reduction is MUCH lower than the threshold, yet Taxcut is evaluating that I am over the limit (based on non-2555 reduction) and bounces me out of the questionaire.  I have to enter this manually and overide several items.  This HAS to be a bug.

 

2) TAX COMPUTAION - same problem.  The "view tax summary report" shows a AGI of $50k, a taxable income of $35k and a tax DUE of $11k (which is ~31%) and that might be OK if there was no 2555 reduction.

 

Makes me doubt MANY calculations...

 

Any ideas???

 

Mark 

Highlighted
Alumni Associate
Posts: 1,925
Registered: ‎12-13-2013

Re: Form 2555 and AGI miscalculation

Hello oscarponcho. Welcome to The Community.

I will do my best to clarify what I can for you, but please understand that much more detail would be needed to address some of the difficulties you are experiencing regarding your question # 2 specifically.

1. The American Opportunities Tax Credit utilizes a Modified Adjusted Gross Income (MAGI) when figuring whether or not a taxpayer is allowed to claim the credit. For this computation, the amount of foreign income excluded claimed on Form 2555 is added back to arrive at your MAGI amount. So I believe this computation may be correct if your MAGI exceeds the $90,000 ceiling ($180,000 if Married Filing Joint). You can read about this In IRS Publication 970 Tax Benefits For Education on page 17. Here is a link to that publication: http://www.irs.gov/pub/irs-pdf/p970.pdf

2. It is difficult to know how to answer this question without more details such as: is all of your earned income from foreign source(s) excludable or did it exceed the $97,600 limit?, did you satisfy the physical presence test or the bona-fide resident test, was any of your income earned while you were within the U.S.?, etc. If not, I would suggest you go back into the software program to review your answers to the questions that address these tests that qualify you to claim the foreign income exclusion just to be certain they were answered correctly or that one or more questions were not left unanswered. IRS Publication 54 Tax Guide For U.S. Citizens and Resident Aliens Abroad may be a useful resource in assisting you. Here is a link to that publication: http://www.irs.gov/publications/p54/index.html

If you still are experiencing difficulties with the software, you should contact the client support team (specifically software support) at 1-800-HRBLOCK for further assistance.

I hope this is helpful. Good luck to you.
WillMc1
Tax Professional (Retired)