[boundforchina]

I am an American citizen, but now I am a bona fided resident of China. My only source of income for 2011 is the wages that I received from the foreign company where I am employed. I am taking the foreign earned income exclusion this year(2011). I have completed form 2555-EZ. I have completed form 1040-A to line 21. On line 21 I have "($13,804)2555-EZ", which is my wages for the entire year and what I should have there according to the instructions on line 18 of the 2555-EZ. My question is, do I need to complete the rest of form 1040-A or leave the rest of the form blank, other than my required signature and date at the bottom of page 2. I ask this because when I complete the rest of the form, I see that, without using the 2555-EZ I will owe $61 according 1040-A, line 45. It is my understanding that my entire foreign income qualifies to be excluded from being taxed by the IRS since I am submitting a 2555-EZ, so, I am a bit confused about how to proceed. I am guessing right now that I can simply leave page 2 of the 1040-A blank since I am attaching the 2555-EZ and my entire income is exlcluded from being taxed by the IRS. Thank you for your answer.

[AtlantaTaxExpert]

First, you must use form 1040 (NOT Form 1040A) with Form 2555.

You list the wages on Line #7 of Form 1040, then list them a second time as a NEGATIVE number on Line #21 of Form 1040. You can leave page #2 of Form 1040 BLANK, except where you sign. A tax return is a LEGAL document which requires an original signature from the taxpayer.

Net result is that you pay NO taxes to the IRS.

Since you pay no taxes and are due no refund, sign the return and mail it to:

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
AUSTIN TX 73301

[AerialZ]

My best advice is to hire a professional. Expat Taxes are very complex and most of the time confusing. I was also a U.S citizen living abroad and like you I wanted to do my own taxes but believe me, you will regret it.

[AtlantaTaxExpert]

AerialZ speaks from experience, and I agree.

Find my email address under my profile if you want further help via email.