@Edgeman , I don't know how exactly the on-line version works ( even though I think it mis substantially the same ).
Based on your reply I created a dummy return with the following specifics:
1. H/W , US persons, filing jointly., with dummy SSNs
2. H/W live i n Germany, H earned US$130,000, W- no income, ;
3. Taxes paid to Germany US$28,300
4. No other income -- i.e. world income = foreign income for simplicity
4. On entering the foreign income as wages ( THIS IS AN ERROR, i will discuss below ) as wage income the US tax showed as US$13,728
5. Thereafter , I went to deductions/Credits tab, continue; chose " I will choose what I work on "; from drop down list selected "Foreign Tax Credit" UPDATE; -->
Did you Pay Foreign Taxes --- yes
Before we begin ....... yes ;
Have you reported all ..... foreign taxes ---- continue
Deduction or Credit -----Take a credit
Tell Us about your Foreign Taxes ---- Choose "None of These Apply";
Next Two Screens --- continue;
Do you want Deduction or Credit ..... Take Credit;
....
....
Foreign Tax Credit Worrksheet.... Continue
;
;
;There is a screen here where it asks for Foreign Country Name --- in my case Germany
Choose Type of Income --- Choose General Category;
Now you will two boxes --- enter the foreign income ( same as Wages entered earlier ) and Foreign Tax Paid ;
There will still be a few screens more to close the whole thing.
Now the US liability goes to ZERO and the rest of the foreign taxes paid is tagged as carry-over or carry back
.
Open the form 1116 and see it has been properly filled out.
The error I made ( on re thinking where to enter the foreign earned income ) is to enter FEI as wages --- to make sure that the Schedule-SE ( Self-employment income --- equivalent to FICA ) gets generated properly, One should use Schedule-C -- enter the gross income = total Foreign Income, No expenses . This will generated a Schedule -SE for the SECA taxes. The "wAges " now just appear on a different line on form 1040.
I found the questions in the path rather badly worded / unclear and had to go around two times to make sure I chose the right things to create the form 1116.
I also found that the easiest way to start all over , is to go to forms mode , open form 1116 and delete it ---- then I was bale to go back to deductions & Credits section and start all over .
Let me know if this works for you --
pk
