Tracy Grey is a U.S. citizen who is a self-employed fisheries consultant with a tax home in New York. Her only income for 2008 was net self-employment income of $80,000. Of the $80,000, $20,000 was from consulting work in Guam and the rest was earned in the United States. Thinking she would owe tax to Guam on the $20,000, Tracy made estimated tax payments of $1,409 to Guam. She was not a bona fide resident of Guam during 2008.
Tracy completes Form 1040 (not illustrated), reporting her worldwide income. Because she earned more than $50,000 and at least $5,000 of her gross income is from Guam, Tracy must file Form 5074 with her Form 1040. All amounts reported on Form 5074 are also reported on her Form 1040.taxmap/pubs/p570-020.htm#en_us_publink100097682
Tracy enters her name and social security number at the top of the form.taxmap/pubs/p570-020.htm#en_us_publink100097683
On Form 5074 (see page 23), Tracy enters her self-employment income from Guam ($20,000) on line 6. She has no other income, so the total on line 16 is $20,000.taxmap/pubs/p570-020.htm#en_us_publink100097684
Tracy's only adjustment in Part II is the deduction for one-half of the self-employment tax on her net income earned in Guam. She enters $1,413 on line 21 and line 28. Her adjusted gross income on line 29 is $18,587.taxmap/pubs/p570-020.htm#en_us_publink100097685
Tracy made estimated tax payments of $1,409. She enters this amount on line 30, and again on line 34 as the total payments.