PatriciaV
Expert Alumni

Get your taxes done using TurboTax

Yes, you may qualify for the Foreign Tax Credit if you paid foreign taxes on foreign income.

 

Find this page by searching on "foreign tax credit". Use the "jump to..." link to go to the start of the section. Answer that you do wish to take the credit (instead of an itemized deduction), then follow the prompts to enter your information.

 

Generally, taking a Foreign Tax Credit on Form 1116 gives you a lower tax bill than if you deduct any foreign taxes paid as itemized deductions.

 

Here's why: when you itemize deductions on Schedule A, each dollar of deduction reduces your taxable income. When you take a foreign tax credit, each dollar of tax paid reduces your income tax.

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