Deductions & credits

Unfortunately, you cannot enter data directly into Form 1116 using the online version of TurboTax. Listed below are the steps to enter the foreign taxes paid on your retirement income. Once completed, you can preview a copy of your Form 1040 to review the amount of your foreign tax credit. The steps to preview your Form 1040 are listed at the very bottom of this post.

To enter the foreign taxes paid on your retirement income, please follow these steps:

1. Click on Deductions and Credits at the top of the screen
2. Scroll down to Estimates and Other Taxes Paid and click on Show More
3. Click on Start or Revisit next to Foreign Taxes and then select Yes
4. Select Yes to the question "Have you already reported all of your foreign income?" and then click on Continue
5. Select any applicable boxes to the question "Tell Us About Your Foreign Taxes" and then select Continue
6. Then select "Take a Credit" to the question "Do You Want the Deduction or the Credit?" Select No to the question "Do all of the following apply to your foreign income?"
7. Continue until you get to the section "Choose the Income Type" and then select the appropriate income category. Click Continue.
8. Add the country and continue through the sections, answering any applicable questions. Keep going until you get to the section "Foreign Taxes Paid" and then enter your foreign taxes and the date. (See screen shot below)

9. Continue through the sections answering any applicable questions until you get to "Foreign Tax Credit Summary" and then click Done

To preview your Form 1040 and check the amount of your Foreign Tax Credit, please follow these steps:

1. Click on "Tax Tools" from the menu on the left-hand side and then click on "Tools"
2. Click on "View Tax Summary"
3. Then click on "Preview my 1040" from the menu on the left-hand side
4. Scroll down to Schedule 3 -Additional Credits and Payments near the bottom and review the amount reported on Line 1 of Part I. (See screen shot below)
5. To return to the program, click on "Back" from the menu on the left-hand side

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