Solved

Line 44 is higher than amount computed from IRS tax table

Forum|Forum|6 years ago
June 1, 2019
2 replies
0 views

I am struggling to understand why the amount on line 44 is higher than what I calculate using the IRS tax table for 2015. Line 43 is $141,106, which calculates out to approximately $26,864 tax owed. But line 44 shows $33,631. Lines 47 through 63 are empty.

We are claiming the foreign income exclusion for a few months, but I do not understand how it affects my tax rate.

Could you please explain? Thanks

TurboTax Premier Online

Best answer by DoninGA

See IRS Form 1040 instructions page 43 for the worksheet to calculate tax if foreign earned income exclusion is claimed - https://www.irs.gov/pub/irs-pdf/i1040gi.pdf#page=43

Foreign Earned Income Tax Worksheet. If you claimed the foreign earned income exclusion, housing exclusion, or housing deduction on Form 2555 or 2555-EZ, you must figure your tax using the Foreign Earned Income Tax Worksheet

The TurboTax program calculates your tax based on the IRS Foreign Earned Income Tax Worksheet—Line 44

DoninGAAnswer

See IRS Form 1040 instructions page 43 for the worksheet to calculate tax if foreign earned income exclusion is claimed - https://www.irs.gov/pub/irs-pdf/i1040gi.pdf#page=43

Foreign Earned Income Tax Worksheet. If you claimed the foreign earned income exclusion, housing exclusion, or housing deduction on Form 2555 or 2555-EZ, you must figure your tax using the Foreign Earned Income Tax Worksheet

The TurboTax program calculates your tax based on the IRS Foreign Earned Income Tax Worksheet—Line 44

T

TaxGuyBill

In a 'nutshell', the Foreign Earned Income Exclusion 'uses up' your lower tax brackets, so your income that is taxable is in the higher tax brackets.

J

JohnC2

Are you referring to IRS's Publication 15 (Circular E)? If so, it's not directly comparable to your 1040 tax return.

It's better to look at Line 7 of your 1040, not line 43, as that is your income from W2s. Line 43 is your taxable income after you've entered in your various deductions.