Summer job in Europe
My daughter is a dual U.S. / E.U. citizen and goes to college in Colorado. This past summer, she had an internship in Europe for two months, where she made 4,700€ (about $5,100). However, because worked as an E.U. citizen, she was paid and taxed as such. The bank never filed any paperwork with the IRS, because they didn't see her as a U.S. citizen.
The money was paid to an E.U. account and most of it was spend on food and rent, so only about $1,500 was exchanged into dollars and deposited in her U.S. bank account.
I'm sure that her salary and time in Europe puts her below all minimums. Can anyone tell me what tax forms I need to submit, if any? How would I report that with FreeTaxUSA?
Best Answer
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It looks like you'll need to enter it as one of these forms: 1099-INT, 1099-DIV, or K-1s
Or not enter the income at all, since she made under the amount required to file. It sounds like that would be fine.
FAQ Where do I enter Foreign income form 1116?
"Foreign taxes entered on your 1099-INT, 1099-DIV, or K-1s will automatically be used for calculating the Foreign Tax Credit."
Foreign income FAQ from FreeTaxUSA
"If you are an employee of the military, the U.S. government, or U.S. government agencies, you are NOT eligible for the foreign earned income exclusion. Otherwise, if your tax home is in a foreign country and you have foreign earned income, such as wages, you may be able to exclude the foreign income from U.S. taxation.
In general, you need to have lived at least 12 months in the foreign country to be eligible for the Foreign Earned Income Exclusion. For example, if you moved to England for a 2-year job assignment, you can usually take the Foreign Earned Income Exclusion. However, if you went to England on a 6-month job assignment, you wouldn't be eligible for the Foreign Earned Income Exclusion.
If you qualify for the Foreign Earned Income Exclusion, you will need to find another provider to assist you with your tax filing. This credit requires Form 2555, which our software doesn't currently support."1
Answers
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Your daughter is a U.S. citizen, so she’s required to report all income she earns worldwide, even if she was paid as an EU citizen and no forms were sent to the IRS.
(IRS worldwide income rule: )Since she earned about $5,100 from her internship and is likely a dependent student, she probably doesn’t need to file a tax return based on income alone, because the filing threshold for dependents with earned income is around $14,600 for 2024.
(IRS Publication 501: )But she can still file voluntarily to report the income.
I'm not sure how she would enter the income using FreeTaxUSA, but these community posts might provide some hints on how to do it:
If taxes were taken out in Europe, you can use the Foreign Tax Credit section in FreeTaxUSA to avoid being taxed twice on the same money. That’s optional unless she owes tax.
(IRS Foreign Tax Credit: )She only needs to file a report for foreign bank accounts (FBAR) if she had over $10,000 combined in foreign accounts at any time during the year, which doesn’t seem to apply here.
(FBAR info: )So, in short: she probably doesn’t need to file, but if you want to file, just report the $5,100 as foreign wages without a W-2, and optionally claim the foreign tax credit.
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How I report this income via freetaxusa? I tried both "Miscellaneous Income" and "Other Income", and in both cases freetaxusa insisted that she had to pay additional Social Security tax. If she's under the $14,600 threshold, shouldn't freetaxusa take that into account?
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Hi Lordnimon,
Unfortunately, we do not support reporting foreign earned income, at this time, in FreeTaxUSA with the ability to claim the foreign tax credit or avoid paying additional FICA tax on the income despite the deduction she qualifies for.
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