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foreign earned income exclusion - self employed

Level 3

While I have a dozen overseas clients, this is the first time I have had one with a 1099-MISC. It is a US based company.  But the work was done in Colombia, which is where the client lives.  He meets the bonafide residence test, as he has lived in Colombia several years.  In past years, he did work for Colombian companies, so I didn't have this question.

According to the IRS website, as long as the work was performed overseas, it qualifies for the foreign earned income exclusion.  The 1099-MISC is below the $!05,900 foreign earned income limit

My question is where I do mark this in Pro Series.   I don't see anywhere on Schedule C to link it to the foreign earned income worksheet.  I am guessing it is Box 2 in the foreign earned income area, as personal service income in a business.  That seems logical to me.  But when I do that, then the taxpayer is subject to SE tax.

Maybe that is where I am wrong.  Does the taxpayer still owe SE tax even if the 1099-MISC is below the foreign earned income limit.  He does have expenses against the income, but I thought this was all excluded, so at this point, I didn't input any expenses.  

Thanks in advance for any help

 

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Level 3

Please disregard.  I found something else that it is still subject to SE tax

Oh well

 

 

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Level 3

Please disregard.  I found something else that it is still subject to SE tax

Oh well

 

 

View solution in original post

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