Foreign Income Exclusion - from S/E tax?

Forum|Forum|5 months ago
January 21, 2026
3 replies
6 views

My clients (young married couple) moved to England in December 2024. They lived in England all of 2025 and rented an apartment there. He had no income but she had $4,000 in self-employment income. She received a 1099-NEC so I’m reporting that on Schedule C. (Mom and dad support their lifestyle because the parents have lots of money.)

I’m filing form 2555 to exclude the $4,000 from Federal income tax since they meet the foreign income exclusion test.

Can I also exclude the$4,000 from self-employment tax as well? If so, I’m not sure where that subtraction is reported on Schedule SE.

ProSeries Professional

T

Terry53029

Intuit Community Champion

No you cannot exclude the SE tax. From IRS: link: https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

Self-employment income: A qualifying individual may claim the foreign earned income exclusion on foreign earned self-employment income. The excluded amount will reduce your regular income tax but will not reduce your self-employment tax. Also, as a self-employed individual, you may be eligible to claim the foreign housing deduction instead of a foreign housing exclusion.

ljr

Level 9

just a random thought - with only $4K in income would you even bother with the form 2555 (unless you charge extra for that) they are soooo under the standard deductions for MFJ ????