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Get your taxes done using TurboTax
Not aware of any. In TurboTax, Form 1116 Foreign Tax Credit can be mailed or electronically filed. Sometimes, it is helpful for us if we know the particular foreign income or foreign tax that a customer may have and then we can determine whether Form 1116 is required or not. Additionally, we can determine if there are forms unique to the customer's specific situation which TurboTax cannot handle.
In connection with completing Form 1116, foreign income needs to be categorized. After classifying your foreign income by category, you must complete a separate form for each of the seven types of income you may have:
- Section 951A category income: A global intangible low-taxed income (GILTI) made by U.S. shareholders of certain controlled foreign corporations but doesn't include passive category income.
- Foreign branch category income: This involves business profits made by U.S. persons from one or more qualified business units (QBUs) in one or more foreign countries but doesn't include passive category income.
- Passive category income: Includes income from interest, dividends, royalties, and annuities.
- General category income: Includes your wages, salary, and any highly taxed passive income. Income becomes "highly taxed" for IRS purposes when the foreign country's tax rate is higher than the U.S. rate.
- Section 901(j) countries: Countries the U.S. has sanctioned for repeatedly providing support for acts of international terrorism, countries with which the U.S. doesn't conduct diplomatic relations, or countries whose governments aren't recognized by the U.S. You must report earnings from any of them.
- Resourced by treaty: Certain income resourced by treaty relates to tax treaties the U.S. has with other countries. Complete Form 1116 for this category if the country in which you worked has a special agreement with the U.S. about how it taxes your income as a foreigner. Under "resourced by treaty" agreements, all your income — including any money you made in the U.S. — counts as income from the treaty country when figuring out the taxes you owe.
- Lump-sum distributions: These include income you received from a foreign-sourced pension plan.
Follow-up with additional information if you have questions about a particular foreign source of income or a foreign tax.
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March 9, 2022
12:01 PM
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