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Old 04-09-2012, 06:43 AM
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AGI Question - foreign income question

Dear Experts,
i am trying to do my 2011 taxes using hr block do it yourself online.
I did not work for anyone at all in 2011 ( only made $8000) from a 1099
in 2010 my AGI was 117 K. I also moved in late 2010 overseas trying to find a job. My question is what is my AGI for 2011 , what is a penelty of under payment , i only made 8k in 2011. Do i also have to file foreign income tax exclusion provided that i have no income in this foreign country.

Thanks



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Old 04-09-2012, 09:22 AM
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“My question is what is my AGI for 2011 “----->To determine your AGI, you need to fill out part of federal tax Form 1040. You should enter your gross income and any adjustments to that income on lines 7 through 37 on the Form; the result will reveal your AGI, which becomes part of a calculation to determine your tax liability. Assume that you are a sole proprietor, NOT a S-corp /C corp or MMLLC< a PS, and your income from a 1099 in 2011 was $8K which is subject to self employment tax ( you report $8K on Sch C/Sch SE)and also assume that t you have $0 adjustment to your gross income, then you need to report your self employment form the 1099, $8K, on Sch C line 1 b Part 1 and also need to report yur deductible business expenses on Sch C line 7 thru 27b part 2. Assume that your business expenses are $5K, then you need to report $3K on line 29/31. As the amount on line 29/31 ,$3K, exceeds $400 you need to file Sch C;You need to report $3K on 1040 line 12 and go to Sch SE.On Sch SE, you need to reot $3K on line 2,3 and report $2771 on line 4($3K *92.35%). ALSO on line 5 , you neeed to report $369 ,13.3%*$2,771. You need to report $212 on 1040 line 27 as an adjustment to your gross income, $8K. So, yur AGI is $2788;$3,000-$212. You should report $2788 on line 37 of 1040.I assume that you are single , then your taxable income is $0; $2,788-$3,800(your personal exemption)-$5800( your std deduction). So, no tax liability. You may be subject to tax refund as long as you paid your quarterly estimated taxes to IRS on your self employer income, $8,000.
“, what is a penelty of under payment , i only made 8k in 2011. “------->No tax liability but you may be subject to tax refund. For example, as assumed above, on your 1040 line 56/61, you need to report $369, your SECA tax ,then you are subject to tax refund as long as the amount on line 63/72 is larger than that on line 61 as I assumed that you paid your quarterly est. taxes to the IRS. For example, assume that you paid quarterly est taxes, $600, to IRS, then $600 on line 63/72 is larger than the amoun ton line 61, $369, you are subject to tax refund of $231;$600-$369.
“Do i also have to file foreign income tax exclusion provided that i have no income in this foreign country.”---->No; you need to file form 2555/2555EZ as long as you have ONLY earned income in the foreign country, so as you have no foreign earned income, salaries, wages, or self employer income in the foreign country, you do NOT need to file Form 2555/2555EZ with the IRS.



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