You should report foreign tax paid on the dividend income in the foreign tax box (Box 7), as your Form 1099-DIV suggests. If you paid federal tax on the dividend income, you could enter that into the federal tax box. The federal tax will count towards the prepayment of income taxes and lower your tax due. Foreign tax paid will count toward foreign tax credit and may not directly lower your tax liability.
If the foreign taxes are under $600 for married or $300 for single filer, you only need to enter the form 1099-DIV to get the foreign tax credit. Otherwise, you need to answer the questions in the "Foreign Taxes" section in TurboTax, which is under "Estimates and Other Taxes Paid" in the "Deductions and Credits" section of TurboTax.
You can follow the steps below to see the foreign tax credit on your return by previewing your form 1040.
1. Select Tax Tools from the menu (if you don't see this, select the menu icon in the upper-left corner)
2. With the Tax Tools menu open, you can then:
- View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu.
- Find the foreign tax credit amount on Schedule 3 - Additional Credits and Payments, Line 1.
