It would be greatly appreciated if someone could help and guide me on the following...
I am filing my 2023 federal tax return and while trying to work on my deductions & credits, specifically for Foreign Tax Credit, I am being asked about Simplified Limitation Election for AMT when I am trying to take tax credits. Meanwhile, this is the first year I am taking tax credits as previous years, though I had foreign earned income but the entire amount could be excluded resulting in not having the need to take the tax credits.
Every year I will have mainly two income categories to report in Form 1116 and for 2023 I have the following categories : 1) Foreign Earned Income as General category income which I have excluded under FEIE and 2) Interest earned from foregin bank accounts as Passive catergory income.
In this case, how should I proceed with the following questions regarding AMT?:
- Again I have not been asked this question in previous years, so I believe it's the first year I am eligible for the election but I would like to get some feedback on this.
- After selecting first year eligibility, I am asked the following question: "Elect Simplified Calculation" vs. "Other Calculations". Frankly I am lost here as both answers take me to Form 1116 and I can still take credit and resulting in no difference in my tax amount due.
I hope my inquiry makes sense, in case of any clarification needs, please let me know in the comments.
Thanks,
