I am a US Resident living abroad. While living outside the US I did some consulting work for a US company. I got a 1099-MISC form. Should I necessarily register the consulting income in Schedule C. Can I register it as regular income on line 7 of 1040? Does it qualify for Foreign Earned Income in Form 2555? thanks
Jaime

“I got a 1099-MISC form. Should I necessarily register the consulting income in Schedule C. Can I register it as regular income on line 7 of 1040. “----->In general, you need to report your income from your 1099-MISC and any associated expenses on either Sch. C, or Sch.C-EZ( if you satisfy the requirements), which is filed with your 1040. If the net earnings on line #31 of Sch C or on kline #3 of Sch C-EZ is more than $400, then you will also need to fill out the Form 1040 SE schedule to figure your self employment tax as self-employed. If it is less, this will just be entered as Other income on line 21 of 1040. No; Line #7 of 1040 is for your wages, salaries, tips, or etc. i.e., dependent care benefits, scholarship and fellowship grants not reported on Form W-2 or etc.
For further info, please visit the IRS Website; 1099-MISC, Independent Contractors, and Self-employed
“ Does it qualify for Foreign Earned Income in Form 2555? “---->Yes; it is your earned self employed income. As a U.S. resident livin’ abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to $91,500 of your foreign earnings. Fundamentally, you must report all income from any source and any country unless it is explicitly exempt under the U.S. tax code.
Here is IRS link for you; Publication 54 (2010), Tax Guide for U.S. Citizens and Resident Aliens Abroad

Thanks for your HELP!

You are very welcome.Good luck!

Hello, Doing my taxes today I thought that the amount shown on my 1099-misc ($7000) would be somehow included in my Foreign Earned Income ($30700) so no tax would have to be paid. However since my 1099-misc income goes to Schedule C and that shows in line 12 of my 1040 as a $4500 profit, a tax is applied!! I am doing something wrong?? If I have a Foreign Earned Income deduction up to $102000, how come any 1099-misc income is not also deducted? I guess thats because the 1099-misc was not considered "foreign income", right? thanks

Hello, Is it posible to file Form 8829 "Expenses for Business Use of home" even if I live in a foreign country and the home is outside the US?? how about a car?? thanks

“Hello, Doing my taxes today I thought that the amount shown on my 1099-misc ($7000) would be somehow included in my Foreign Earned Income ($30700) so no tax would have to be paid.”--->Agreed.
“ However since my 1099-misc income goes to Schedule C and that shows in line 12 of my 1040 as a $4500 profit, a tax is applied!! I am doing something wrong??”--->Correct; as long as the amount on 1040 Sch SE line 4 is $400 or exceeds $400, REGARDLES of your FEIE or FTC, you MUST pay SE taxes to the IRS( you never pay SE taxes and quarterly estimated taxes to the foreign taxing authorities). Also as long as you are filing as a sole proprietor, I guess you are as an IC, and/or a self-employed individual, you generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.However, you do not have to pay estimated tax for the current year if you had no tax liability for the prior year; you were a U.S. citizen or resident for the whole year; your prior tax year covered a 12 month period. You, as a Self-employed person working abroad, do not qualify for the foreign housing exclusion. Instead you can deduct your allowable housing expenses from your gross income. The housing deduction is calculated on Form 2555 Part VI and IX. The deduction is then reported on Form 1040 Line 36.
“If I have a Foreign Earned Income deduction up to $102000, how come any 1099-misc income is not also deducted? I guess thats because the 1099-misc was not considered "foreign income", right? Thanks”-->1099MISC income,i.e., commissions or professional fees etc. that you earn in your foreign tax home is ALSO part of your foreign earned income, so as part of your foreign earned income, 1099misc income is also subject to either full or partial exclusion. Depending on your situation. However, you can never exclude your unearned income in the foreign nation(if you have),i.e., dividends or interest income or capital gains overseas. As far as I know, for 2010, you may qualify to exclude from income up to $91,500 of your foreign earnings, and you can claim foreign tax credit on the amount exceeding $91,500. on your US federal and state returns. You can never claim your FEIE on your state return, BUT only on your federal return.
“Hello, Is it posible to file Form 8829 "Expenses for Business Use of home" even if I live in a foreign country and the home is outside the US?? how about a car?? “--->Yes both of them on Sch C. You need to file the form as you need to file your Sch C to reduce your taxable self employment net earning on your Sch C and income amount on Sch SE line 4 also.