I am not a tax/accounting professional, just a long-time TT user, so please view this post with prudence.
1. Foreign tax can be treated as a deduction or a tax credit. In the former case, the amount is lumped with all other itemized deductions, such as mortgage interest, state tax, etc., and contributes to reducing the tax liability that way. In the latter case, the amount goes to the bottom line and reduces the tax liability, nominally dollar for dollar; can be very attractive.
2. Alas, computation of tax credit that can be applied has gotten far more complicated nowadays; hence, we have Form1116 and now F1116 Sch B. Apparently, not all the nominal amount of foreign tax paid in 2021 can be used; a portion of it may need to be held back and "carried-over" to the following year. Not only that, carried-overs from previous multiple years have to be factored into the computation, not just that from 2020, as common sense would dictate (this is an impression on my part from looking at the worksheet or Sch B, and
where my amateurism shows).
3. Our situation: F1116 has recently been incorporated into TT, but not F1116 Sch B which awaits a 3/31 release date. However, most discerning to me, from comments gleaned in this forum, is that even with that release e-file may still not be possible :-(.
4. What to do: Paper-file as TT suggests. Not sure if we should wait for F1116 Sch B before doing that, but it is neither here nor there.
However, if one insists on e-filing, there seem to be several options:
EF-1. The simplest is to forget about foreign tax credit, but incorporate it as an itemized deduction if that matters. In my case, standard deduction far exceeds itemized deductions, so it is not a good option for me.
EF-2. E-file with an opt-out of the foreign tax credit (by deleting that form from your return package, as suggested), with the view of doing an amended return later. However, I sense some hedging on TT's part on how the amended return may pan out. That is, count on losing that money.
EF-3. Override the "carry-over" amount and set it to zero somehow, as has been suggested in the forum, and TT may then perhaps let you e-file. In my case, I will be giving up about 40%, but hey, I have 60% in my pocket. Plus the lure of an amended/additional return.
[What is not clear is if I choose EF-1, EF-2, or EF-3, how would TT handle my tax return for 2022. Would the worksheet magically repair and correct itself after the dust has settled? But that is a fight for another day.]
