# IRS Form 1040 -- How to identify foreign earned income



## xali

Hello, 
I have a few foreign earned income tax questions which I don't see answered in relevant IRS publications. All my 2013 income is foreign earned but I'm not required to file because the amount is not large enough for my filing status. However, I do want to file in order to claim the IEC and Additional Child Tax credit, which I can do because I only lived overseas the last five months of 2013. I am not claiming any foreign earned income deductions, exclusions or credits (I do not qualify for them and these would also preclude me from claiming the other credits). Here are my questions:

(1) I can't figure out how to show in my 1040 (or other forms) that my income is foreign earned (since I'm not using income exclusion forms). 

(2) Form 1040 Line 7 (Wages, salaries, tips. Attach Forms W-2). How do you handle the "attach forms W-2" part? Do you attach your foreign earned income paystubs?

(3) Form 1040 Line 57 (Unreported Social Security and Medicare Tax). Do I leave this blank? My income was of course already reported to Social Security in Spain.

And two more general questions:

(4) How does one avoid paying taxes twice (US and Spain) on the same income? 

(5) When it comes to the obligation to file a US income tax return when I work in Spain, does it matter that I have dual citizenship of the two countries? That is, I don't work in Spain as a US citizen but as a Spanish citizen.

If anyone can answer any of these questions, I'd really appreciate it. Thank you!


----------



## Bevdeforges

xali said:


> (1) I can't figure out how to show in my 1040 (or other forms) that my income is foreign earned (since I'm not using income exclusion forms).


If you're not taking the Foreign Earned Income Exclusion, then you don't need to show that your income is foreign sourced.



> (2) Form 1040 Line 7 (Wages, salaries, tips. Attach Forms W-2). How do you handle the "attach forms W-2" part? Do you attach your foreign earned income paystubs?


If you don't have W-2's then you don't attach anything. They basically have to trust you to report your foreign income. If you're using tax preparation software, there should be a separate form to fill out for foreign salary income, but if you're doing things manually, just put your gross salary income (before any deductions for social insurances) on line 7.



> (3) Form 1040 Line 57 (Unreported Social Security and Medicare Tax). Do I leave this blank? My income was of course already reported to Social Security in Spain.


Leave it blank. When they say "social security" they mean only US Social Security, not your Spanish social security.



> And two more general questions:
> 
> (4) How does one avoid paying taxes twice (US and Spain) on the same income?


If you're not taking the FEIE (form 2555), you need to claim your Spanish income taxes paid against whatever US income tax liability you generate on form 1116. (You won't be eligible for the FEIE anyhow, until you have been outside the US for a full 12 months.) 



> (5) When it comes to the obligation to file a US income tax return when I work in Spain, does it matter that I have dual citizenship of the two countries? That is, I don't work in Spain as a US citizen but as a Spanish citizen.


Your Spanish citizenship doesn't really affect your US tax filing obligation, though if you file for the FEIE on form 2555, I think they do ask about your nationalities.
Cheers,
Bev


----------



## BBCWatcher

Occasionally citizenship distinctions come up in treaties. For example, U.S. Social Security benefits are U.S. tax free (but not Italian tax free) to U.S.-Italian dual citizens living in Italy per a treaty between those two countries. So if you're trying to claim a treaty benefit then your citizenship(s) might make a difference.

But that's something of a footnote.


----------



## xali

Bevdeforges, that is wow-wonderful. I can't believe you answered all my questions. You really made my day. Thank you so much! Thanks to BBCWatcher as well.


----------

