Generally, you report your foreign income where you normally report your U.S. income on your tax return. Earned income (wages) is reported on line 7 of Form 1040; interest and dividend income is reported on Schedule B; income from rental properties is reported on Schedule E, etc.
Do I need to file taxes for foreign income?
Do U.S. citizens have to pay taxes on foreign income? Yes, U.S. citizens have to pay taxes on foreign income if they meet the filing thresholds, which are generally equivalent to the standard deduction for your filing status. You may wonder why U.S. citizens pay taxes on income earned abroad.
How do I report my foreign income to the IRS?
If you earned foreign income abroad, you report it to the U.S. on Form 1040. In addition, you may also have to file a few other forms relating to foreign income, like your FBAR (FinCEN Form 114) and FATCA Form 8938. If you earned money while working as a freelancer or contractor overseas, you’re considered self-employed and still pay taxes.
How to claim foreign earned income on 1040?
You must attach Form 2555, Foreign Earned Income, to your Form 1040 or 1040X to claim the foreign earned income exclusion, the foreign housing exclusion or the foreign housing deduction. Do not submit Form 2555 by itself.
Which is form to file for foreign earned income exclusion?
If you and your spouse both qualify to claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you and your spouse must file separate Forms 2555 to claim these benefits.
Do you pay taxes on income earned in a foreign country?
You can use the IRS’s Interactive Tax Assistant tool to help determine whether income earned in a foreign country is eligible to be excluded from income reported on your U.S. federal income tax return. If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income.
