Deducting Solo 401k from remaining Self Employed Income after Foreign Earned Income Exclusion(FEIE)

It depends. The problem is you need to have taxable self-employed income to claim your contribution.  Here is how to report.

1. First report your foreign income and then claim the exclusion up to the full $126,500
2. Now prepare a Schedule C in your return.  You will need to do this regardless because you will need to pay your self-employment tax. Here you can also report the contribution to your 401 K. 

• To navigate to the self-employed retirement plans section in your Schedule as you prepare to report your income and expenses, go to:
• TurboTax Online/Mobile: Go to self-employed retirement plans. You need Turbo Tax Premium to report this
• TurboTax Desktop:  Go to Less Common Business Situations>self-employment retirement.  You would need Turbo Tax Home and Business to report.

Now you need to exclude up to $126,500 reported in your Schedule C. If your net income is below the amount, you will exclude the full amount. If above threshold amount, your taxable income in your return will only be the amount that is over the $126,500 threshold.

1. Log into your account
2. Select Wages and income
3. Less Common income
4. Miscellaneous Income, 1099-A, 1099>start
5. Scroll to the bottom of the page to Other Reportable Income
6. Other taxable income, answer yes
7. Then give a brief description of the income and the amount listed. Here describe this as FEIE exclusion and list the amount with a minus sign in front.

Now all that is left is your self-employment tax that has been assessed on your net income, your 401-K contribution, and any taxable income over $126,500.