Thanks for your reply. Yes, I have seen that page and attempted to follow its instructions. There is no getting around it: the software is flawed and Turbotax needs to fix it.
Step 2 of the page that you sent tells you to "Enter all your foreign income in Wages & Income if you haven't already".
Now, there are two places in the Wages and Income section where this could go: (1) US Wages and Income i.e. Box 1, and (2) Less Common Income: Foreign Earned Income and Exclusion. Given my objective to take the Foreign Tax Credit and not the FEIE, I believe I should be entering the foreign income in Box 1. In fact, I think that's the whole point, as Turbotax' own tutorial will tell you "If you do not include wages earned in another country as part of your U.S. income, you cannot claim a credit for foreign taxes paid on those wages". The first software problem is that you can't so this in Step-by-Step mode as it won't give you the option to enter income without a W-2, so you have to enter this income in the Forms view. This foreign income is then captured as Wages and Income. So far so good. The income is captured in Box 1.
I then have to ignore the Less Common Income: Foreign Earned Income section of the Wages and Income module. Why? Because if you go through it, you get to an interview question that states "Enter Your Foreign Earned Wages (this could include wages or payments from a foreign employer or cash". If I enter the same income number in here as I did in Box 1, the software double counts the income. You can see it in the Tax Summary in Forms view (it takes 2x the income and from that deducts the allowed foreign income exclusion, which is meaningless as it should not be counting the income twice). On this basis, as stated, I have to declare zero Foreign Earned Income in the Less Common Income: Foreign Earned Income section.
Now if I go the Foreign Tax Credit section as the page you sent suggests, and follow the steps, there is no point where it asks for the income you earned in the foreign country (in my case the UK). It does ask you for Other Gross Income (none), Definitely Related Expenses, and Foreign Losses. It then asks for Foreign Taxes Paid (as it should). I have entered this into the software (the taxes were automatically withheld). The taxes were paid and not accrued. I then complete the rest of the interview firstly without entering last year's Foreign Tax Credit Carryover amount and the software is still showing a US Federal tax liability which makes zero sense: (1) my tax rate in UK is higher than in US, (2) there is some benefit from the standard itemized deduction. Something is broken and I can't figure out what it is. If I go to Forms view and look at the Tax Summary, my total credits does not capture any Foreign Taxes Paid at all.
Plus despite having zeroed out the Less Common Income: Foreign Earned Income section of the Wages and Income module, the Forms view is still showing that I have errors in Form 2555. There should not be a Form 2555!!!!!!
