WITAXLADY Posted September 20, 2021 Report Share Posted September 20, 2021 I need some help please. I have the 2555 form And the conversion value. From the W-2 - how do i use the conversion? No exemption as not enough days.. Just a summer job Thank you, D Quote Link to comment Share on other sites More sharing options...
Lion EA Posted September 20, 2021 Report Share Posted September 20, 2021 Isn't the W-2 in US$? If his tax document is in AU$, then use the conversion value. Isn't the 2555 form for excluding foreign income? You said he doesn't qualify for substantial presence test. Did he pay Australian taxes? Can you use Form 1116 to take a foreign tax credit? Or, take an itemized deduction? 1 Quote Link to comment Share on other sites More sharing options...
WITAXLADY Posted September 20, 2021 Author Report Share Posted September 20, 2021 duh - yes it is in US $$'s 2555 - need to meet physical presence test? And no Aussie taxes paid so I guess very simple - Thank you, D Quote Link to comment Share on other sites More sharing options...
Lion EA Posted September 20, 2021 Report Share Posted September 20, 2021 https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion Quote Link to comment Share on other sites More sharing options...
WITAXLADY Posted September 20, 2021 Author Report Share Posted September 20, 2021 thank you - I did read that.. Interesting - if summer or short term D Quote Link to comment Share on other sites More sharing options...
Lion EA Posted September 20, 2021 Report Share Posted September 20, 2021 If summer or short term work for a foreign employer in a foreign country AND paying foreign tax to that country, your client will have a foreign tax credit on his federal return. If it's a high tax rate country, that can be a valuable credit. 2 Quote Link to comment Share on other sites More sharing options...
Catherine Posted September 23, 2021 Report Share Posted September 23, 2021 And use foreign employer compensation if you don't need the 2555 to exclude. Quote Link to comment Share on other sites More sharing options...
WITAXLADY Posted September 24, 2021 Author Report Share Posted September 24, 2021 Sorry - what is foreign employer compensation? and when I use the 1116 - the tax is $940 converted but she only gets credit for $432? Why does she lose so much? Thx d Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted September 24, 2021 Report Share Posted September 24, 2021 The tax credit allowed is related to the ratio of foreign and domestic income and tax. Just follow the lines on page 2 of the 1116. It's pretty straightforward, assuming the page 1 entries are accurate. 1 Quote Link to comment Share on other sites More sharing options...
joanmcq Posted September 25, 2021 Report Share Posted September 25, 2021 I’m confused as to whether your client is a US person who worked in Australia for a summer job or an Australian who worked in the US. In either case, the 2555 isn’t used. If client is US person with Australian earnings, put the wages on the FECWKS, and the income taxes paid on the 1116. Don’t forget to convert the Australian dollars to US dollars before putting the numbers on the return. 2 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted September 25, 2021 Report Share Posted September 25, 2021 On 9/19/2021 at 9:33 PM, WITAXLADY said: From the W-2 No exemption as not enough days.. Just a summer job Did she receive a US Form W-2 with US taxes withheld? Or, did she pay Australian taxes? Quote Link to comment Share on other sites More sharing options...
WITAXLADY Posted October 4, 2021 Author Report Share Posted October 4, 2021 well - there is not an EIN so filing by paper.. and I will have to look - thx D Quote Link to comment Share on other sites More sharing options...
joanmcq Posted October 5, 2021 Report Share Posted October 5, 2021 Put the foreign wages on the FECWK! You don’t need to paper file 1 Quote Link to comment Share on other sites More sharing options...
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