I have a question regarding the foreign tax credit:
I am entering the amount for wages (roughly 30K) but there's also approximately 10K of interest income. If I only enter 30K for wages, I get "x" amount of foreign tax credit which lowers my tax due to the U.S. a certain amount. However, I also PAID taxes on the Canadian interest. If I also add the interest as a separate line item, I get a bigger tax credit which lowers my U.S. tax due even more. I feel like I should be able to add the interest income as well but the page says: Enter gross income you received from sources within Canada. Do not enter any income already reported on Form 1099-INT, Form 1099-DIV, Form 2555, or Schedules K-1.
But again, if I don't enter the foreign interest, TurboTax calculates a lower foreign tax credit even though, again, I also paid taxes on the foreign interest. What am I missing?
