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Old 27.08.2011, 22:07
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US Tax Forms 1040 & 2555 EZ

Cheers Everyone -

I know there are a few threads on how to fill out the US Tax Forms and what-not, but my question is a bit more specific. I am getting confused about the "credit" that is given to individuals living abroad. I know that the credit for 2010 is 91'500 USD, but when I am doing my taxes and filling out the forms, I am coming out on the negative side (meaning I need to pay) even though I only made about 75K USD in 2010. When I am calculating my "Tax" (Line 44 in the 1040) in the "Tax Computation Worksheet" and the "Earned Income Tax Sheet" I am always coming up with big numbers because it is telling me to add my salary 2x. In the end, I am coming up with a number around 21K in taxes !?! I subtract this from my "taxes" in Switzerland and I am always in the negative.

Does this mean I have to pay? Or does this mean something different? I am hoping the 91'500 covers this?

Confused a bit ... a lot bit. Maybe I am missing something?

Thanks for the help - very much appreciated
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Old 28.08.2011, 00:11
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Re: US Tax Forms 1040 & 2555 EZ

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Cheers Everyone -

I know there are a few threads on how to fill out the US Tax Forms and what-not, but my question is a bit more specific. I am getting confused about the "credit" that is given to individuals living abroad. I know that the credit for 2010 is 91'500 USD, but when I am doing my taxes and filling out the forms, I am coming out on the negative side (meaning I need to pay) even though I only made about 75K USD in 2010. When I am calculating my "Tax" (Line 44 in the 1040) in the "Tax Computation Worksheet" and the "Earned Income Tax Sheet" I am always coming up with big numbers because it is telling me to add my salary 2x. In the end, I am coming up with a number around 21K in taxes !?! I subtract this from my "taxes" in Switzerland and I am always in the negative.

Does this mean I have to pay? Or does this mean something different? I am hoping the 91'500 covers this?

Confused a bit ... a lot bit. Maybe I am missing something?

Thanks for the help - very much appreciated
Have you never done your own taxes before? Have you been entering your income twice all these years? Perhaps you should try using TurboTax online instead.....

I guess that's a better "introduction" than 'Why do I have to pay US taxes and how do I get my RAV benefits?'
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Old 28.08.2011, 23:33
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Re: US Tax Forms 1040 & 2555 EZ

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I know that the credit for 2010 is 91'500 USD
That is an "earned income exclusion", not a "total income exclusion". For example, it applies to your salary, but not to dividends, interest, or capital gains. Also, it is an "exclusion" not a "credit". (There is an "earned income tax credit" for low-income taxpayers, but that is a completely separate subject.)

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I am always coming up with big numbers because it is telling me to add my salary 2x.
Please be specific: which form, and which line tells you to add your salary 2x?

Simple procedure:
* complete form 2555-EZ (earned income exclusion), to determine the "exclusion amount" on line 18
* as stated in form 2555-EZ line 18, enter that exclusion amount as a negative number on form 1040 line 21
* be sure to attach form 2555 with your form 1040
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