I am a student US Citizen and both my parents are US Citizens. All 3 living abroad for a couple of years. Parents have been filing the local foreign taxes return as per the law and also filing US Tax returns every year by converting the foreign income to USD as required by the IRS ( also using the Foreign Income Credit form IRS 2555) though the tax payable to US government in 1040 ends up becoming nil due to the tax credits for the tax paid to the foreign country.
In FAFSA, should I use the IRS DRT option ( tried using this option and it retrieves the 2017 information from IRS) OR should I use the “Foreign Taxes Filing” option?
Thanks for the reply. I am aware 2017 tax return is correct. However, the question was, since since my parents file both US tax return and Foreign Tax returns ( since they live and earn in a foreign country), which option should I pick - IRS DRT or Foreign Tax Return Filed? depending on the option I choose, the next questions vary in FAFSA.
This is just a guess, so hopefully someone else will chime in who knows for sure. But if your parents are filing a US tax return that shows all of their income and if the Form 2555 is attached, that will show the amount of taxes paid. So the IRS DRT option should correctly reflect income and taxes paid, which is the information that FAFSA wants.