FreeTaxUSA Foreign Income Reporting Question for US Citizen Living Abroad

Thank you so much for pointing me in the right direction! I was looking all over the place but somehow missed the Foreign Income section. I do have one follow-up question though - when entering the income, do I need to convert the amount myself or does FreeTaxUSA handle the currency conversion? Also, do you know if I need to provide any additional documentation about the exchange rate I used if I do it myself?

You'll need to convert the amount yourself before entering it. FreeTaxUSA doesn't handle currency conversion automatically. Use the IRS yearly average exchange rate or the actual exchange rates from when you received your payments - either is acceptable as long as you're consistent. You don't need to submit documentation about the exchange rate with your return, but keep records of how you calculated the conversion in case of questions later. The IRS publishes yearly average exchange rates that are considered acceptable for tax purposes, so using those is often the simplest approach.

Does it actually work with FreeTaxUSA specifically? I've tried other "helpers" before and they usually only support TurboTax or H&R Block. I've got income from both Canada and Mexico this year and I'm already dreading figuring it all out.

I'm skeptical about these kinds of services. How does it handle the Foreign Earned Income Exclusion calculations? That's usually the trickiest part with multiple countries and partial year residency.

Yes, it actually does work with FreeTaxUSA! It gives you specific guidance on which sections to use in whatever tax program you're using. I was worried about the same thing since most tools seem focused on the big expensive software. For the Foreign Earned Income Exclusion calculations, it walks you through the physical presence test or bona fide residence test (whichever applies to your situation) and helps determine your qualifying period. It even helped me figure out how to properly allocate my income when I was in multiple countries. It basically translates the complicated IRS rules into plain English steps.

How does this actually work? The IRS phone system is notoriously terrible, so I'm confused how a third-party service could somehow get through easier than I could myself?

Yeah right. I've been trying to reach the IRS for months about foreign tax credits from my time in Germany. There's no way this actually works. If it did, everyone would be using it instead of wasting days on hold.

It uses an automated system that dials continuously and navigates the IRS phone tree until it gets a spot in the queue. When an agent is about to pick up, it calls you and connects you directly to the agent. It's basically doing the waiting for you. As for why everyone isn't using it, I think it's just not that well known. I only found it after searching specifically for solutions to the IRS hold time problem when I was desperate. It's not a magic solution that lets you skip the line - you're still in the same queue as everyone else - but the service does the waiting instead of you having to keep your phone tied up for hours.

Can you use both the exclusion and the credit in the same year? I worked in two different countries - paid taxes in one but not the other. Wondering if I can exclude the untaxed income and get credits for the income where I paid foreign taxes?

Yes, you can use both in the same tax year, but not on the same income. So in your case, you could potentially use the Foreign Earned Income Exclusion for the income from the country where you didn't pay taxes, and then use the Foreign Tax Credit for the income from the country where you did pay taxes. FreeTaxUSA will let you work through both forms. Just be careful about how you allocate the income to make sure you're not double-dipping. The software should help prevent this, but it's good to be aware of the distinction.

That's different from the original question because you have US-source income (1099-NEC) rather than foreign-source income. Since you were paid by a US company as a contractor, you'd report this on Schedule C as self-employment income, not as foreign income. However, you might still qualify for the Foreign Earned Income Exclusion if you meet either the Physical Presence Test or the Bona Fide Residence Test. FreeTaxUSA has sections for both your self-employment income and the FEIE. You'll just need to complete both parts.

Thanks for clarifying! That makes sense that it's still US-source income. I think I do qualify for the Physical Presence Test since I was outside the US for 330+ days last year. Just to be clear - in FreeTaxUSA, I should first enter my 1099-NEC income as self-employment, then separately go to the Foreign Income section to claim the exclusion on that same income? I don't want to accidentally report the same income twice.

Exactly right! You'll first enter your 1099-NEC income on Schedule C as self-employment income in FreeTaxUSA. Then you'll go to the Foreign Income section and complete Form 2555 for the Foreign Earned Income Exclusion. The software will automatically coordinate between the two - it won't double-count your income. When you complete the FEIE section, you'll indicate that you're excluding self-employment income that you already reported elsewhere in your return. FreeTaxUSA will then reduce your taxable income by the exclusion amount (up to the limit for 2022, which was $112,000). Just make sure you have good records of your travel dates to prove you meet the Physical Presence Test - you'll need to show you were outside the US for at least 330 days during a consecutive 12-month period. The IRS can be pretty strict about this requirement.

This is really helpful! I had no idea there were two separate forms for foreign accounts. Quick question - if I only had my Singapore bank account with about $15,000 in it at the highest point, do I need to file both FBAR and Form 8938? And since I was living abroad for most of 2022, would the higher threshold of $200,000 apply to me for Form 8938?

Yes, with $15,000 in your Singapore account, you would need to file the FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need Form 8938 since $15,000 is well below the $200,000 threshold that applies when you're living abroad (which it sounds like you were for most of 2022). Just remember that FBAR has to be filed separately through the FinCEN website by April 18th (with an automatic extension to October 15th), while your regular tax return with FreeTaxUSA is due by the normal deadline. The FBAR filing is completely separate from your tax software - it's a common mistake people make thinking their tax software handles both. Keep good records of your account balances and when you were physically present in each country, as both will be important for determining which forms you need to file.

Yes, with a $15,000 balance you would need to file FBAR since you exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 because the threshold for that form when living abroad is much higher ($200,000 for single filers, or $300,000 at year-end if married filing jointly). The key thing to remember is that FBAR uses the highest balance at any point during the year, while Form 8938 generally uses year-end balances (though there are some "any time during the year" thresholds too). Since you were living abroad for most of 2022, you would use the higher thresholds for Form 8938. Make sure to file your FBAR through the FinCEN website by April 15th (or October 15th if you get an extension for your regular tax return). The penalties for not filing FBAR can be really steep, so don't skip it even though it's a separate filing from your tax return!

Yes, with $15,000 in your Singapore account, you would need to file FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 since $15,000 is well below the $200,000 threshold that applies to you as someone living abroad for most of 2022. Just to be clear on the thresholds for Form 8938 when living abroad: it's $200,000 on the last day of the year OR $300,000 at any point during the year for single filers. Since your account was only at $15,000, you're well under both thresholds. FBAR is filed online through the FinCEN website (BSA E-Filing System) and is due by April 15th with an automatic extension to October 15th. Make sure you don't miss this - the penalties can be really harsh even for innocent oversights.

Yes, with $15,000 in your Singapore account, you would need to file the FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 since you were living abroad and the threshold for that is $200,000 for single filers living outside the US (or $300,000 at year-end). Just to be safe though, double-check your exact residency status for tax purposes - the IRS has specific rules about what constitutes "living abroad" for Form 8938 purposes. Since you mentioned you were only in Singapore for about 8 months before returning to the US, your tax home determination might affect which threshold applies to you. The FBAR filing deadline is different from your tax return too - it's due April 15th but has an automatic extension to October 15th. You file it online through the FinCEN website, completely separate from FreeTaxUSA.

Based on your situation with $15,000 in your Singapore account, you would need to file FBAR since you exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 since $15,000 is well below the $200,000 threshold that applies to you as someone living abroad for most of 2022. Just to clarify the thresholds for Form 8938 when living abroad: it's $200,000 on the last day of the year OR $300,000 at any point during the year for single filers. Since your account had $15,000 at its highest, you're well below both thresholds. Remember that FBAR has to be filed separately through FinCEN's website (BSA E-Filing System) by April 18th this year, with an automatic extension to October 16th if you miss the April deadline. It's completely separate from your tax return in FreeTaxUSA.

Yes, with $15,000 in your Singapore account, you would need to file the FBAR since you exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 because the threshold for US citizens living abroad is much higher - $200,000 for single filers or $400,000 if married filing jointly (at the end of the year) or $300,000/$600,000 respectively (at any time during the year). Since your account balance was only $15,000, you're well below the Form 8938 thresholds for someone living abroad. Just remember that FBAR has to be filed separately through the FinCEN website by April 18th (with an automatic extension to October 15th), while your regular tax return goes through FreeTaxUSA. The FBAR filing is actually pretty straightforward once you know about it - you just need your bank account details and the maximum balance during the year.

Yes, with $15,000 in your Singapore account, you would need to file the FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 because the threshold for taxpayers living abroad is much higher - $200,000 for the total value of all your foreign financial assets at the end of the tax year, or $300,000 at any point during the year. Since you were living in Singapore for most of 2022, you'd qualify for the higher "living abroad" thresholds rather than the lower US resident thresholds. So just the FBAR filing through FinCEN would be required in your case. Make sure to file it by the deadline - it's usually April 15th but can be extended to October 15th automatically.

Yes, with $15,000 you would need to file the FBAR since you exceeded the $10,000 threshold. However, you likely wouldn't need Form 8938 because the threshold for US citizens living abroad is $200,000 for single filers (or $300,000 at year-end). Since your account only had $15,000, you're well below that threshold. Just to be safe though, double-check your residency status for tax purposes - the higher thresholds only apply if you're considered to be living abroad for tax purposes, which generally means you either qualify for the Foreign Earned Income Exclusion or are a bona fide resident of another country. If you don't meet those criteria, the lower US resident thresholds would apply ($50,000). The FBAR filing is completely separate from your tax return and has to be done through the FinCEN website by the same deadline as your tax return (with automatic extension to October if needed).

Yes, with $15,000 in your Singapore account, you would need to file FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 because as someone living abroad for most of 2022, the higher threshold of $200,000 would apply to you, and your $15,000 account balance is well below that. Just remember that FBAR has to be filed separately through the FinCEN website (not through FreeTaxUSA or with your tax return), and the deadline is usually April 15th but can be extended to October 15th automatically. Make sure you have all the details about your Singapore bank - account number, bank name, address, and the maximum balance during the year.

Yes, with $15,000 in your Singapore account, you would need to file the FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 because the threshold for single filers living abroad is $200,000 (much higher than your $15,000). The key thing to remember is that FBAR looks at the highest balance at any point during the year, while Form 8938 looks at the total value on the last day of the tax year OR the highest value during the year. Since you were living abroad, the $200,000 threshold applies to you for Form 8938. So in your case: FBAR required, Form 8938 not required. Just make sure to file your FBAR electronically through the FinCEN website by April 15th (or October 15th if you file for an extension).

Yes, with $15,000 in your Singapore account, you would need to file FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 because if you were living abroad for most of 2022, the higher threshold of $200,000 would apply to you as a qualifying individual living outside the US. Just to be safe though, double-check your exact residency status for tax purposes - the IRS looks at your tax home and where you were a bona fide resident, not just physical presence. If there's any question about whether you qualify for the higher threshold, it might be worth consulting with a tax professional since the rules can be pretty complex for expats. And remember, FBAR is filed separately through FinCEN's website (BSA E-Filing System), not through FreeTaxUSA or your regular tax return. The deadline is usually April 15th but can be extended to October 15th automatically.

Yes, with $15,000 in your Singapore account, you would need to file FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 because the threshold for US citizens living abroad is $200,000 (or $300,000 on the last day of the year), and your $15,000 account falls well below that. Just to clarify the living abroad determination - you need to have your tax home in a foreign country and be a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year. If you qualify, then yes, the higher thresholds would apply to you for Form 8938. The FBAR filing is done separately through the FinCEN website (BSA E-Filing System) and has a deadline of April 15th (with automatic extension to October 15th). It's completely separate from your tax return in FreeTaxUSA.

Yes, with $15,000 in your Singapore account, you would need to file the FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 because the threshold for US citizens living abroad is much higher - $200,000 for single filers at the end of the tax year or $300,000 at any point during the year. Since you were living in Singapore for most of 2022, you'd qualify for the higher "living abroad" thresholds for Form 8938. So in your case, just the FBAR would be required. Remember that FBAR is filed separately through the FinCEN website (BSA E-Filing System), not through your tax return or FreeTaxUSA. The deadline is typically April 15th but can be automatically extended to October 15th.

Based on your situation with $15,000 in your Singapore account, you would need to file FBAR since you exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 since $15,000 is well below the $200,000 threshold for single filers living abroad (which would apply to you since you were in Singapore for most of 2022). Just remember that FBAR has to be filed separately through the FinCEN website by April 15th (with an automatic extension to October 15th), while Form 8938 (if needed) would be filed with your tax return through FreeTaxUSA. The FBAR filing is completely separate from your tax software. Also keep in mind that for determining if you were "living abroad" for the Form 8938 thresholds, the IRS looks at where your tax home was and whether you were a bona fide resident of a foreign country, not just physical presence. Since you were working in Singapore for 8 months, you'd likely qualify for the higher thresholds.

Yes, with $15,000 in your Singapore account, you'd need to file the FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need Form 8938 since $15,000 is well below the $200,000 threshold that applies when you're living abroad as a single filer. The key difference is that FBAR looks at the highest balance at any point during the year (which sounds like $15,000 in your case), while Form 8938 looks at the total value at year-end or the highest value during the year, whichever is higher. Since you were living in Singapore for most of 2022, you'd qualify for the higher $200,000 threshold for Form 8938. Just remember that FBAR is filed separately through the FinCEN website (Form 114) and has a different deadline than your tax return - it's due by April 15th but has an automatic extension to October 15th. No extension is needed, it's automatic.

Yes, with $15,000 in your Singapore account, you would need to file the FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 since $15,000 is well below the $200,000 threshold that applies when you're living abroad (which it sounds like you were for most of 2022). The key difference is that FBAR looks at the highest balance at any point during the year, while Form 8938 looks at the total value on the last day of the tax year or the highest value during the year. Since you were abroad, the higher threshold definitely applies to you for Form 8938. Just remember that FBAR is filed separately through the FinCEN website (due April 15th with automatic extension to October 15th), not through FreeTaxUSA or your regular tax return.

With $15,000 in your Singapore account, you would need to file FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 because $15,000 is well below the $200,000 threshold that applies to single filers living abroad (which sounds like your situation since you were in Singapore for most of 2022). Just to be clear on the living abroad qualification for Form 8938 - you need to have your tax home in a foreign country AND be either a bona fide resident of a foreign country or be physically present in foreign countries for at least 330 days during a 12-month period. If you meet those criteria, then yes, the higher $200,000 threshold would apply to you. Remember that FBAR is filed separately through the FinCEN website (Form 114) and has a different deadline - it's due by April 15th but has an automatic extension to October 15th. It's completely separate from your tax return filing.

Yes, with $15,000 in your Singapore account, you would need to file the FBAR since it exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 because $15,000 is well below the $200,000 threshold that applies when you're living abroad as a single filer. The key difference is that FBAR looks at the highest balance at any point during the year (your $15,000), while Form 8938 looks at year-end balances or highest balances during the year but with much higher thresholds. Since you were living abroad for most of 2022, the higher thresholds would indeed apply to you for Form 8938 purposes. Just remember that FBAR is filed separately through the FinCEN website (fincen.gov) and has a different deadline - it's due by April 15th but there's an automatic extension to October 15th. It's completely separate from your tax return filing.

Yes, with $15,000 in your Singapore account, you would need to file the FBAR since you exceeded the $10,000 threshold. However, you likely wouldn't need to file Form 8938 because as someone living abroad for most of 2022, the higher threshold of $200,000 would apply to you, and your $15,000 account balance is well below that. Just remember that FBAR has to be filed separately through the FinCEN website (BSA E-Filing System) by April 15th (with an automatic extension to October 15th), while Form 8938 would be filed with your regular tax return through FreeTaxUSA if it were required. The FBAR filing is completely separate from your income tax return. Make sure to keep good records of your account statements showing the maximum balance during the year, as that's what the FBAR requires you to report.