Confused about 2555ez or 1116

Hi all,

I have been working in the uk for 345 days in 2016 with UK income of about $30,000. Based on this I pass the FEIE physical presence test criteria. I thought I had it all sorted out but after reading these forums now I am confused whether I have to use form 1116 too? I was taxed on my uk income by the HMRC but I thought because my income falls within the $101,300 for 2016 I would be okay with just FEIE?

Thanks.

Electing to claim the FEIE may not produce the optimum result. You may have non-excluded income such as employer pension contributions. Equally, you may wish to maximise foreign tax credit carryovers.

Electing to claim the FEIE may not produce the optimum result. You may have non-excluded income such as employer pension contributions. Equally, you may wish to maximise foreign tax credit carryovers.

Does it really matter if following the instructions on form 2555EZ tells me to subtract the lowest of line 16 and 17 from my wage in line 7 of 1040 I.e $30,000 - $30,000 = $0 due in taxes to the IRS  ? I guess my question really is that if I have done this correctly can I get away with just using FEIE? I filled out all my forms a week ago and was ready to submit it today as the deadline is tomorrow but then I started reading these forums and found out about the 1116. I kind of want to be done and over with this to be honest.

I understand what you've said about pension contributions but does it count as 'earnt' if it's not something that I received ?

Thanks for your input.

I filled out all my forms a week ago and was ready to submit it today as the deadline is tomorrow......

If you qualify for FEIE, the deadline for those resident abroad is 15 June, not tomorrow.

I understand what you've said about pension contributions but does it count as 'earnt' if it's not something that I received ?

Thanks for your input.

Doubtless such income is "earnt" (sic); but Internal Revenue Code Section 911 says that employer contributions do not qualify for the FEIE. As theOAP has said, there is no deadline tomorrow.

Are you guys referring to this;

newcomer link: https://www.irs.gov/individuals/international-taxpayers/u-s-citizens-and-resident-aliens-abroad [nonactive]

If so I will have to fill out form 4686. Does this apply to 1116 too?

Edit: I found the bit you referred to I think;

newcomer link: https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-what-is-foreign-earned-income [nonactive]

Now I just don't understand why it says 'Amounts included in your income because of your employer's contribution to a non-exempt trust or annuity contract'. What is an exempt trust the ?
So the amount my employer has contributed to my pension account should be added as a positive figure on 1040?


Thanks again for your input

Are you guys referring to this;

https://www.irs.gov/individuals/international-taxpayers/u-s-citizens-and-resident-aliens-abroad

If so I will have to fill out form 4686. Does this apply to 1116 too?

The two month extension to 15 June is automatic. You do not need 4686 unless you wish to extend the filing date to mid-October. When using the automatic 15 June extension you do need to include a simple cover statement with your return such as: I was outside the United States on 18 April 2017. I am a permanent resident in the United Kingdom.

It applies for any 1040 return you file.

The two month extension to 15 June is automatic. You do not need 4686 unless you wish to extend the filing date to mid-October. When using the automatic 15 June extension you do need to include a simple cover statement with your return such as: I was outside the United States on 18 April 2017. I am a permanent resident in the United Kingdom.

It applies for any 1040 return you file.

Ok thanks. Do I add employer contributions as a positive figure on my 1040? This extension applies to US citizens too? I'm going to look at form 1116 now it just looks quite daunting to be honest.