Yes, it will be taxed again by the IRS. As you are a US resident and file jointly with your spouse, both of you are required to report worldwide income including her foreign portion. However, if you have paid taxes to the foreign authorities, to avoid double taxation, IRS allows you to claim a foreign tax credit on your US tax return. To claim this foreign tax credit, you would need to file a Form 1116 Foreign Tax Credit.
To enter this information in the TurboTax program, here are the steps:
- Open up your TurboTax account and select Pick up where you left off
- At the right upper corner, in the search box, type in "foreign tax credit" and Enter
- Select Jump to foreign tax credit
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