Follow these steps to report foreign wages on Form 2555 or 2555-EZ:
- In Screen 31, Foreign Income Exclusion (2555), locate the Employer subsection.
- Enter the Name.
- Select Foreign Wages from the left navigation panel.
- Enter the Employer Name.
- Select the Form 2555 Name or Number from the drop-down menu (this will tie Screen 31.1 and 31.2 together).
- Complete all applicable information
- Wages (Ctrl+E for Allocation Method)
- Federal W/H (if applicable)
- You must select an allocation method in Allocation. Lacerte uses this entry to determine how to allocate wages between U.S. and foreign earned income. If an element of income needs to be allocated using two different allocation methods, press CTRL+E to open the expanded input screen for that item of income. Here, you can enter multiple occurrences of that element with different allocation methods.
- Foreign Wages should not be entered on Screen 10, Wages, Salaries, Tips, etc. unless the Taxpayer/Spouse does not qualify for the Foreign Income Exclusion.