Using Turbo tax easy step mode:
1. Enter US income X in W2 wages section
2. Select foreign earned income under Less Common Income section, follow the step and enter the Canada income Y.
Switch to form mode, you will find the following form created for you
a. Form 2555: line 45 in this form is the total of the exclusioin, it will be Y if it's less than about 85,000 (the limit you can exclue)
b. Foreign earned income tax work sheet: Inside this form you will find that the tax is calculated as Tax = (X + Y - family deduction) * TaxRate1 - Y * TaxRate2
c. Form 1040: the line 7 (wages) will be your US only income, which is X. line 21 (other income) will be 0.
1. Enter US income X in W2 wages section
2. Select foreign earned income under Less Common Income section, follow the step and enter the Canada income Y.
Switch to form mode, you will find the following form created for you
a. Form 2555: line 45 in this form is the total of the exclusioin, it will be Y if it's less than about 85,000 (the limit you can exclue)
b. Foreign earned income tax work sheet: Inside this form you will find that the tax is calculated as Tax = (X + Y - family deduction) * TaxRate1 - Y * TaxRate2
c. Form 1040: the line 7 (wages) will be your US only income, which is X. line 21 (other income) will be 0.