No. Don't enter on the worksheet or form. Enter through the program itself. Here is some steps that may help. First of all, you will want to be in step by step or easy step (If you have a MAC). Do not enter these in the forms mode. Here is the procedure.
- Go to Federal
- Deductions and credits
- Estimate and other taxes paid
- Foreign Tax Credit>start or revisit
- When it asks We just need to check if you have any uncommon situations indicate I paid foreign taxes on income I earned while working in another country.
- At some point in the interview, it will ask if you wish to take a deduction or a credit. If you are able to itemize deductions, you may consider taking the deduction.
- There will be questions in the next screen asking you the description of the Foreign Taxes paid and the amount.
- If you find that this has no effect on your tax return, you may circle-back and choose you wish to take a credit.
- Navigate and record the entries that the program asks for and when you reach the page that mentions Foreign Tax Credit Worksheet, this is where you take notice.
- The first that you will be asked is what category of income is it, you will say Passive income.
- Next screen will say Country Summary, select add a country
- When it says Other Gross Income - XXXX, Here you put in the Gross Amount you earned in that country.
- Then you will navigate through the screens until you come to a screen that says Foreign Taxes Paid - XXXX, here is where you record the amount paid under Foreign Taxes.
- Finish out the section.
As a FYI, a foreign credit is a non-refundable credit. This means if you have no tax lability to apply the credit, you may not be able to take it this year. If that is the case, your credit can be carried back one year or carried forward ten years in the future. Also, you may wish to prepare this section if all your other income has been reported as your total income will reflect in the calculation of your credit.
Reach back if you have further questions.
@Murugan6
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
