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gonefshn11
Level 2
December 29, 2022
Question

Foreign income tax on a dividend, is it deductible, and where to report it.

  • December 29, 2022
  • 3 replies
  • 1 view

I have Foreign income tax withheld by a foreign country on a dividend paid this year.

1. Is it deductible, and

2.  where to report it?

 Thanks in advance for your assistance. 

3 replies

N
NCperson
Level 15
December 29, 2022

@gonefshn11 - it is deductible, but for most, it is better to take it as a tax credit....Form 1116 is where it gets reported.  TT will walk you through that. 

Mike9241
Level 15
Mike9241Level 15
Level 15
December 29, 2022

you can either deduct it on schedule A. or take a tax credit.  

credit is usually better

if under $300 and if you're single ($600 if filing jointly) no form 1116 is required. if over it is

if you use Turbotax you should be asked about foreign taxes as you are filling out the dividend info 

 

since you're using desktop you can go into forms mode 

enter the tax on line 7 of the dividend worshhet

for an itemized deduction check box a

for a credit where your total foreign tax credits exceed the limit  

you'll need to complete B, C and D

D is for the amount of the foreign source income included in the dividend. the 1099 should give you some info on this. 

 

Mike9241
    Hal_Al
    Level 15
    Hal_AlLevel 15
    Level 15
    December 30, 2022

    If the foreign tax paid is reported to you in box 7 on form1099-DIV,  TurboTax should automatically claim the credit, after you enter the 1099-DIV

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