Hi @pk ,
Thanks for your reply. To first answer your questions,
- I have been in India for 10+ years, after spending 15+ years in the US. I am employed with an US headquartered MNC in India,. My spouse is a US citizen. I have been using Turbotax for the last 23 years to file my US taxes. I use Turbotax download and not the online version because with my foreign income, the tax return is complicated and I find the download version a bit more flexible. For my Indian income, I use a local (Indian) CPA.
>> you, a US citizen and residing in India have earnings in both USA and in India.
Correct.
>> your specific issue is how to ameliorate the effects of double taxation on US 1099-DIV with foreign taxes paid component.
Correct.
The points 1 and 2 you make are also correct.
About point 3, let me illustrate through an example. Note that I file US taxes in April and Indian taxes in July. Note also that the Indian tax year goes from April to March, and the US tax year goes from January to December.
If an income accrued in Dec 2019, then it falls in the US tax year 2019, and the Indian tax year 2019-20. For this income, I would first pay US taxes in (April 2020), and then use them to offset any Indian tax due (in July 2020).
If an income accrues in Jan 2020, then it falls in US tax year 2020, and the Indian tax year 2019-20. For this income, I would first pay Indian taxes (in July 2020), and then use them to offset any US tax due (in April 2021).
Right now, I am trying to find the solution for the second case. I have some US dividends paid out in March 2019, for which I have already paid Indian taxes. I need to get credit for that in the US tax return.
Now, Turbotax already supports foreign taxes paid. But the assumption TT makes, as far as I can tell, is that foreign taxes have been paid on foreign income (such as when a US based ETF invests in foreign stocks, gets dividends from those stocks, and pays foreign taxes). I am looking for how to enter foreign taxes paid on *US* income.
Points 4 and 5 in your response are also correct. I use both FEIE, and foreign tax credit (for taxes paid on income amounts over what can be excluded).
Thanks a ton for your help so far. I hope my response enables you to address my query.
