How to Prepare and File IRS Form 2555 for Foreign Earned Income
American citizens living and working overseas must use a different form to complete their taxes from those within the United States. Complete the Foreign Earned Income Form 2555 to report your overseas earnings. Here's some helpful information for preparing and filing form 2555.
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Instructions
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Choose the correct form and make sure you qualify for form 2555. Use 2555 if you're a US citizen or US resident alien residing in a foreign country. Claim housing deductions and self-employment income.
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Go to the Internal Revenue Service's website. When you download the form be sure to download the instructions too. Form 2555 instructions are separate from the actual document used for reporting.
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Complete Form 2555. The Foreign Earned Income form is a three-page tax form and the instructions are 11 pages long. This is not a quick and easy form to complete. If you have questions or are unsure about how to complete the form, you should contact an accountant or the Internal Revenue Service.
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Submit the form to the Internal Revenue Service. The tax due date is generally April 15th in any given year. However, if you are out of the country when the tax due date arrives, you'll be granted an automatic two-month extension to file. If you do take the extension, you must attach a statement with your return and explaining that you meet the conditions for which the extension applies.
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Tips & Warnings
With forms 2555, you can claim housing deductions and self-employment income. If you did not have any self-employment income for the year, and your total income for foreign earnings does not exceed $85,700, then you should use Form 2555-EZ. Form a 2555-EZ does not allow you to take housing deductions.
If you elect to use the two-month extension, you're allowed to pay your taxes two months later. However, the Internal Revenue Service charges interest on the unpaid tax return beginning the date the taxes are due, April 15th, and ending the date on which you pay your taxes.
