Foreign tax credit

Forum|Forum|4 months ago
April 11, 2026
5 replies
257 views

I am trying to file my taxes and really struggling with entering foreign income from my job abroad so that I recieve the foreign tax credit and am fairly disappointed with turbo tax's interview prompts. I have entered the income from my foreign job in to income section and have declined to take the foreign income tax exclusion then in the deductions section I started inputting the details for the Foreign Tax Credit and it asks me for the income amount again and for the amount of tax I paid. And this seems to work, but the details of my income from my foreign job that i input in the income section does not seems to be carried over into the deductions section because in that deductions section it says that my gross annual income is double what it should be. so turbo tax is obviously counting my income twice. which I guess makes sense because I have to enter it in the income section, but then have to enter the same number again in the foreign tax credit deductions section. So what I want is a dummy's step by step instruction on how to do this without doubling up my gross income. Also, there are a ton of questions in the ftc section about alternative minimum tax and I ignore them because I dont understand them, but it should be clearer or simpler, no? Why do I pay 100 dollars to spend ages on this and it not be easy! Someone brighter than me help!

TurboTax Premier Online

pk_

Level 15

@user17759445623 , understand your frustration with the process, abstruse questions and unclear direction. So please accept my apologies ( I am a volunteer helping users and have no financial or otherwise connection with Intuit). But before I can create a reasonable step-by-step instruction for you I need some facts"

(a) Are you a US person ( citizen/GreenCard) ?

(b) Where is your tax home ? Has it been so for the whole of 2025 or only part of the year?

(c) Are you trying to exclude/ take Foreign Tax Credit for wages/ self-employment for part year or for the whole year of 2025 ? Is this because you are dual status for 2025 or what ?

Please answer my questions and I will happy to help you through this.

I will circle back once I hear from you--yes ?

user17759445623Author

Level 2

yes I'm a us citizen

Tax home is abroad and yes I live abroad

I want to take the foreign tax credit, not exclude the income. The reason I want to take the tax credit is i believe this will give me more tax relief as the country i am in taxes my income at 26% at the source and I would like to get thr tax credits not exclude the income

Thanks for any help that can be provided however my question is less about tax rules and more about how to get the tt software to do it's job.

pk_

Level 15

@user17759445623 , you do realize that while under tax treaty US will recognize the full foreign taxes paid, but the allowable FTC for the year is limited to the LESSER of that paid to a foreign taxing authority and that imposed by US on the same doubly taxed income. Thus in your situation your US taxes may come down to zero and the rest of the paid ( FT) will be carried ( backward and forward ) but in each year you will need foreign source income. Generally it is an asymptotic recovery and may or may not help.

I would suggest using both ways and see which works better for you .

AS I understand from your earlier post --- you entered the gross foreign income in two places --- you need to enter only when using the form 1116 -- foreign source income, general category, source country , paid, when paid and the Foreign Tax paid. That should work.

When done go to forms mode and look over Form 1116 Comp wks. and form 1116 to make sure all makes sense -- any changes, make only on 1116 Comp. wks. and not on form 1116 itself.

Then look at form 104/01040SR wks. and finally form 104/1040-SR

Does this make sense ?

Let me know if this solves your issue and /or any more I can do for you --yes?

user17759445623Author

Level 2

As an update i have now played with the program and did not report my foreign income in the income section, but did list it in the deductions section. But this did not fix the problem because in the deductions section it still states my gross income to be about 40k more than it should be and then when i go to the federal summary section it doesnt include my foreign income which i thought I reported in the dedections section.

Meanwhile tt is giving me badges for participation points. Would really prefer a software program that is intuitive and without glitches.