TT not calculating FTC correctly - simple calculation

Forum|Forum|4 years ago
March 11, 2022
1 reply
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It seems like TT is calculating my FTC about $3k less than what it should be. I used the IRS' pdf form to do the calculation myself and I'm getting a different answer.

My calculation is simple (I think) because it's just foreign income (after the foreign income exclusion already claimed) divided by total taxable income and then multiplied by my US tax liability. I'm using all of the same figures as TT but TT gives me a lower number, and you can't see the calculation.

Anyone know what I'm missing?

rjs

Level 15

It's not that simple. I don't know what you mean by "the IRS' pdf form." Did you use the Foreign Earned Income Tax Worksheet on page 35 of the IRS Instructions for Form 1040, and the other worksheets that it directs you to? Be sure to read all the instructions, and follow them to the letter. Don't assume that you know how the calculation is done.

stephdegroot1Author

Level 2

Sorry, agree that IRS pdf is not clear. I mean the Form 1116. I know what the FEI figures are but I’ll double check the calculation that you reference.

rjs

Level 15

I misunderstood your reference to "FTC." I thought you were talking about calculating your income tax on Form 1040 line 16. The Foreign Earned Income Tax Worksheet is not used to calculate the Foreign Tax Credit. If you think that the calculation on Form 1116 is incorrect, we can't tell you what you're missing based on just a vague statement that the credit is "about $3k less than what it should be." You have to say specifically what TurboTax calculates and what you think it should be, with specific line numbers and exact amounts.