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I moved back from USA in 2009. in 2010 I did not have any income (no W2) in USA, only salary in India. While preparing 2010 tax return using Tax Act I am getting almost 10K tax refund. I am filing MFJ plus 2 dependents. Spouse do not have any income and kids are in school. I am showing my Indian salary in 2555. Is this okay? If not how to resolve it.

Hi as1971,

If you are using Form 2555, there should not be any refund if the earned income (Indian Salary) is less than $ 91K, even if its more than $ 91K your refund cannot exceed $ 2800, i.e. $ 1000 each for Child tax credit for 2 dependents and $ 800 for Making Work pay program.

We provide assistance in both USA and India tax filing services from Pune. You can send us the complete details at [email]expat@kkassociate.com[/email] or visit us at www.kkassociate.com

Regards,
KKA

as1971;391735I moved back from USA in 2009. in 2010 I did not have any income (no W2) in USA, only salary in India. While preparing 2010 tax return using Tax Act I am getting almost 10K tax refund. I am filing MFJ plus 2 dependents. Spouse do not have any income and kids are in school. I am showing my Indian salary in 2555. Is this okay? If not how to resolve it.

One could hope :-), but no this is definitely not OK. You should check the form 1040 generated by TaxAct.

I am not sure if I a entering data correctly on 1040. But if I remove the Indian Salary from line 7 then the refund becomes 0. Shouldn't I report the Indian Salary on line 7 of 1040 or it should go on line 21-Other Income?

Hi as1971,

The salary income will come in Line 7 of Form 1040 and if you taking foreign earned income exclusion i.e. filing form 2555/ez then Line 21 will have a negative amount for the foreign earned income.

Regards,
KKA