I also was waiting for the 3/3 update. The post from @DoninGA spurred me to revisit the FTC. To make a long story short...
- I have carryovers from previous years.
- On my 2021 return, I had the Foreign Taxes as a DEDUCTION on Schedule A, and was getting the same message about paper filing.
- I wanted to check and see if a CREDIT was more advantageous, so in Turbotax I changed it to a credit assuming my tax would go down. But, it actually went up because my credit is limited.
- So, I changed it back to a deduction.
- When I changed it back, the process eliminated Form 1116 from my return and cleared all the errors, allowing me to file online.
Reading on the IRS website, it is perfectly acceptable to change methods each year. You cannot use carryovers as a DEDUCTION, however.
My question is, does this make sense? If I claim a deduction this year, do I need Schedule 1116 attached to my return? Is there an impact on future year's returns?
Thank you for your help.
