Do I have to enter exact amounts (dollars and cents) on the tax forms? Is it okay to round?

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A. Yes, round away! According to the 1040 instructions, “You can round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3. If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total.” (2009 1040 Instructions, page 21 Rounding Off to Whole Dollars) Q. Can I fill out the 1040ez instead of the 1040? It seems a lot easier. A. It is a lot easier, but sorry, you have to fill out the regular 1040 in order to get the tax exclusion on your foreign earned income. Passing the Physical Presence Test on the 2555ez is what gets you the foreign earned income exclusion, which keeps Uncle Sam’s dirty hands of your Japanese income; however, (according to the 2555ez Instructions) you cannot file a ... more
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