The IRS limits the foreign tax credit you can claim to the lesser of the amount of foreign taxes paid or the U.S. tax liability on the foreign income. The excess limit is created when the U.S. taxes on that foreign income are greater than the foreign taxes paid.
If you weren't given full credit for your foreign taxes paid this year, you can carryover the unused amount for ten years to offset future foreign income. Turbo Tax In any case, since the amount of your credit is $667 this year, the system should generate a Form 1116 because it is over the filing threshold of $600 for a married Filing Jointly return. Also, the Form 1116 worksheet is generated to help you keep track of the Foreign Tax Credit carryover from year to year.
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