Friday, July 29, 2011

Foreign Income but no W2 -- what to do on your 1040

Where do you put foreign income on the IRS Form 1040 when you file your tax return if you work overseas, as I do in China, and do not have a W2?   I just spent half an hour on the phone with a very patient and helpful IRS expert on foreign income--and learned that the income goes on the 1040 Form Line 7, just like U.S. wages and salaries--even if you do not have the W2 to attach.

This was a relief to have confirmed, because the past week I've been facing an issue with U.S. finances, where I was told by experts that I had to provide a W2 for foreign income on Line 7--even though they admitted W2s are only provided in the U.S.   But as the IRS man explained, wages and salaries are reported on Line 7, regardless of where they are earned, and if no W2, it goes there anyway (I had put it under "other income" a few years, which he said was clearly wrong--though thankfully they did not take me to task for it).

I know many others have had this problem, and hope this clears it up.  If still doubtful, refer to the Form 1040 Instructions, Page 19 (for 2010 at least), which explains it quite clearly.

Thanks to the IRS for explaining that (and, I have to add, I've phoned them several times from China to ask about tricky issues, and they've always been quite helpful).

Enjoy Amoy!

Bill

Bill Brown Xiamen University www.amoymagic.com