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@itonewbie wrote:

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For line 1h (Other earned income, see instructions), I have that number( FEI) but do not have any form that indicates this number for foreign earned income. In front of    "see instructions,' there is no explanation.

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Line 1h is not where your client's income from the business should be reported regardless of that foreign business' classification for US tax purposes.  Suggest you familiarize yourself with the international tax reporting and peripheral issues highlighted in the previous response or refer your client to a specialist as the exposure for both your client and you could be substantial.

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I now recall someone did comment that PS doesn't use Line 1a but Line 1h.  That's fine given your client has no W-2.  The reason no F.2555 was produced probably has to do with you not having entered all the data correctly to indicate your client is eligible for FEIE.

But this brings on another problem.  You mentioned your client runs his own business.  If you entered this income on F.2555 directly, that would indicate your client is an employee of his business.  That implies that the business a body corporate and, therefore, a CFC with a F.5471 filing requirement and a whole host of other compliance and tax complexities.