Hi,
This is the first year we are filing the tax jointly. I was still a non-resident alien in 2006, but according to the IRS if file jointly and one spouse is a U.S. citizen then we can choose to treat the non-resident spouse as a U.S. resident. And this is what we are doing now, my husband is a U.S. citizen and I will be treated as a U.S. resident for tax purpose.
Now, according to the IRS, my income, which is all foreign income should be excluded by filling out the 2555. However, it seems like this is not the case when I was working it out on TurboTax or Taxcut. Here is what I have observed, for example, my husband made $50,000/yr and during the filing the program showed that when file jointly we can get back $1000, but when we entered the foreign income that I has made, $2000. It added that $2000 with my husband's salary, total showed $52,000, and the refund we can get back dropped to $900.
I thought that the $2000, should be added to the total, but then subtracted immidately because the exclusion, and the refund should not be changed. Shouldn't this be the case? What have we done wrong?
The only things that I can think of is that maybe the travelling dates that I put in on the 2555 or the "Wage adjustment" field.
for travelling out of the foreign country, I put down all the trips that I have made to the U.S. visiting my hunsband, and I put down 0 for business day, and 0 income. For the "wage adjustment" I put down 0 too, maybe I should put down -2000 in this case?
Thank you very much for your help.