Foreign income that is not reported on a Form W-2 must still be reported on your U.S. tax return based on the type of income and whether it is taxable. U.S. citizens and residents are required to report worldwide income, regardless of whether a Form W-2 or other information return is issued. For foreign income, you report it on Form 1040 using the line that corresponds to the type of income.
Reporting Foreign Income on Form 1040
Wages or Salaries from Foreign Employment: If you earned wages from a foreign employer and did not receive a Form W-2, report the income as wages on Form 1040, Line 1. You should maintain supporting records (such as pay statements or contracts). If eligible, you may claim the Foreign Earned Income Exclusion using Form 2555, which reduces the taxable portion of those wages.
Foreign Business or Self-Employment Income: If you earned income from a foreign business or self-employment, report it on Schedule C (Form 1040). The net profit flows to Schedule 1 (Form 1040), Part I, Line 3, and then to Form 1040, Line 8. You must also compute self-employment tax on Schedule SE (Form 1040).
Foreign Investment Income (Interest, Dividends, etc.):
- Interest income → Form 1040, Line 2b (taxable interest)
- Dividends → Form 1040, Line 3b (ordinary dividends)
If thresholds are met, you may also need to file Form 8938.
Foreign Gambling Winnings: If you are a U.S. taxpayer, gambling winnings from foreign sources are reported as other income on Schedule 1 (Form 1040), Part I, Line 8b/8z, and then flow to Form 1040, Line 8.
Expat-Specific Compliance Considerations
Foreign Earned Income Exclusion (FEIE): If you meet the requirements, you may exclude a portion of foreign earned income using Form 2555. The excluded amount reduces income reported on Form 1040 but does not eliminate the requirement to report the income.
Foreign Tax Credit (FTC): If you paid foreign income taxes, you may claim a credit using Form 1116, which flows to Schedule 3 (Form 1040) and then reduces your total tax on Form 1040.
Additional Reporting Requirements:
- Form 8938 may be required for foreign financial assets above threshold amounts
- FBAR (FinCEN Form 114) may also be required separately (not filed with the IRS)
Key Principle
Always report foreign income based on its character (wages, business income, investment income, etc.), not based on whether you received a Form W-2 or other reporting document.
Source:
Publication 54
Form 1040 Instructions (2025)
Disclaimer: Always verify details with the current year’s IRS Forms and Instructions or consult a tax professional for personalized advice. The information provided is general and may not apply to your specific situation.