Foreign Earned Income Tax Worksheet—Line 16

If Form 1040 or 1040-SR, line 15, is zero, don’t complete this worksheet. 1. Enter the amount from Form 1040 or 1040-SR, line 15 1. _____ 2a. Enter the amount from your (and your spouse’s if filing jointly) Form 2555, lines 45 and 50 2a. _____ b. Enter the total amount of any itemized deductions or exclusions you couldn’t claim because they are related to excluded income b. _____ c. Subtract line 2b from line 2a. If zero or less, enter -0- c. _____ 3. Add lines 1 and 2c 3. _____ 4. Figure the tax on the amount on line 3 . Use the Tax Table, Tax Computation Worksheet, Qualified Dividends and Capital Gain Tax Worksheet*, Schedule D Tax Worksheet*, or Form 8615, whichever applies. See the instructions for Form 1040 or 1040-SR, line 16, to see which tax computation method applies. (Don’t use a second Foreign Earned Income Tax Worksheet to figure the tax on this line.) 4. _____ 5. Figure the tax on the amount on line 2c . If the amount on line 2c is less than $100,000, use the Tax Table to figure this tax. If the amount on line 2c is $100,000 or more, use the Tax Computation Worksheet 5. _____ 6. Subtract line 5 from line 4. Enter the result. If zero or less, enter -0-. Also include this amount on the entry space on Form 1040 or 1040-SR, line 16 6. _____ * Enter the amount from line 3 above on line 1 of the Qualified Dividends and Capital Gain Tax Worksheet or Schedule D Tax Worksheet if you use either of those worksheets to figure the tax on line 4 above. Complete the rest of that worksheet through line 4 (line 10 if you use the Schedule D Tax Worksheet). Next, you must determine if you have a capital gain excess. To find out if you have a capital gain excess, subtract Form 1040 or 1040-SR, line 15, from line 4 of your Qualified Dividends and Capital Gain Tax Worksheet (line 10 of your Schedule D Tax Worksheet). If the result is more than zero, that amount is your capital gain excess. If you don’t have a capital gain excess, complete the rest of either of those worksheets according to the worksheet’s instructions. Then, complete lines 5 and 6 above. If you have a capital gain excess, complete a second Qualified Dividends and Capital Gain Tax Worksheet or Schedule D Tax Worksheet (whichever applies) as instructed above but in its entirety and with the following additional modifications. Then, complete lines 5 and 6 above. These modifications are to be made only for purposes of filling out the Foreign Earned Income Tax Worksheet above. 1. Reduce (but not below zero) the amount you would otherwise enter on line 3 of your Qualified Dividends and Capital Gain Tax Worksheet or line 9 of your Schedule D Tax Worksheet by your capital gain excess. 2. Reduce (but not below zero) the amount you would otherwise enter on line 2 of your Qualified Dividends and Capital Gain Tax Worksheet or line 6 of your Schedule D Tax Worksheet by any of your capital gain excess not used in (1) above. 3. Reduce (but not below zero) the amount on your Schedule D, line 18, by your capital gain excess. 4. Include your capital gain excess as a loss on line 16 of your Unrecaptured Section 1250 Gain Worksheet in the Instructions for Schedule D.