My question is, How to report Income earned abroad? =========>>>aslongas you are a US Citizen, you must report both US source and world wide income to the IRS: both U.S. domestic tax law and U.S. tax treaties contain a number of provisions designed to prevent ?double taxation,? or taxation on the same income in both countries .Domestic law provisions include the foreign tax credit. These provisions, in many cases, can reduce or even eliminate the U.S. federal income tax that would otherwise be due by you. Keep in mind, however, that even if no U.S. tax is owed, a U.S. tax return still generally must be filed in order to benefit from these provisions, and the failure to do so can result in severe penalties.i guess for the year 2017, youdo not qualify for foreign earned income exclusion that is up to $102,100 for 2017. The Foreign Earned Income Exclusion for 2017 is the amount of salary or business income you can exclude from your US taxes while living abroad. If you qualify for the FEIE for 2017, and you earn $102,100 or less in wages, you will pay zero Federal income taxes.
To qualify for the exclusion,you must be either one of two tests:
? Bona fide resident test: you were a bona fide resident of a foreign country for a period that includes a full U.S. tax year, or
? Physical presence test: you must be physically present in a foreign country A/ countries for at least 330 full days in any 12-month period that begins or ends in the tax year in question.
So you may qualify for the feie 2018.
Is it sufficient to report it in form 2555? Or is it also necessary to report foreign income in my 1040 line 7? (obviously I don't have a W2 from my European income.)======>>as said, unless you qualify for foreign earned income exclusion, you do not file form 2555 ;only If you qualify foreign earned income exclusion as said then, , you can use Form 2555 to figure your foreign earned income exclusion and your housing exclusion or deduction. aslongas you file US return as a dual citizen or a US expat,, A foreign tax credit is generally offered by income tax systems that tax residents on worldwide income, to mitigate the potential for double taxation. The credit is generally limited to those taxes of a nature similar to the tax against which the credit is allowed you can deduct your foreign taxes on Sch Aof 1040, like other common deductions, or you can use Form 1116 for a tax credit and subtract the taxes you paid to another country from whatever you owe the IRS. Generally, you report your foreign income where you normally report your U.S. income on your tax return. Earned income (wages) is reported on line 7 of Form 1040; interest and dividend income is reported on Sch B; etc.
Also remember,you, As a US person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of theforeign financial accounts exceeds $10kat any time during the calendar year. You must file. FinCEN) 114 Due Date for FBAR
is April 15.