Declared our foreign income but turbo tax says we get our US taxes refunded??? Is this right?

Hi, I just did turbo tax for our 2007 taxes. My husband and I worked in the UK for part of 2006 & 2007. In turbo tax I put in all our dates and income earned overseas in 2007 and it filled in form 2555 for us. In the last part of 2007... My husband also earned $12, 500 in the USA as a salaried employee. He had state and federal taxes taken from his paycheck. I input all the details from his w2. Turbo tax says we will get a $1,116 federal refund and a $568 state refund...which is everything he paid to federal and state since he returned to the USA...does this sounds right as it seems to good to be true to me!!!! Any opinions are welcome. I just want a few before I e-file it!

Public Comments

1. The IRS just clarified the tax calculation with form 2555. If your income on line 43 was zero, you have zero tax. MFJ gets $10700 and $6800 knocked off automatically and that's more than $12,500.