Taxfun
Level 3

A Self-employed Taxpayer  qualifies for foreign earned income exclusions. However,  a % of the schedule C income is sourced to USA  based on the days he performed services in the USA. Unlike for wages, ITO software has drop down box that you can choose " allocate the income between US and Foreign" , schedule C doesn't have that option . Schedule C input sheet just allows you to enter the % of foreign income. I override the amount of "income earned in US on business o form2555 part II line 14". then I received a critical diagnostic which prevents me from efiling the tax return.  It looks like that override doesn't affect the any numbers on the tax return.  However, if I remove the override, the tax return doesn't reflect the correct information. I called the agents with ITO. They couldn't find a solution. Does any one have experiences on this issue? 

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