Here's the deal: I worked abroad earlier this year, and all of my foreign earned income meets the exclusion requirements.
However, it appears that the money I earned abroad does count in my gross income. So that bumps my tax bracket up for the money I earned in the states??
I thought the tax brackets were based on taxable income, not gross income, am I mistaken?
If I don't report foreign income, my taxable income is X, and my tax liability is Y. However, if I include my foreign income then take the exclusion, my taxable income is still X, but my tax liability is Y + a lot.
Is that how it's supposed to be or is there some glitch somewhere? What am I missing?