It depends. You might be asked to fill out Form 1116 even if your foreign tax is less than $300($600 if MFJ) due to a few reasons:
- Specific Income Types: If your foreign taxes are related to certain types of income, such as passive income from mutual funds or ETFs, you may be asked to fill out Form 1116..
- Manual Entry Issues: If the information from your 1099-DIV or 1099 INT form isn't entered correctly, TurboTax might prompt you to fill out Form 1116.
To resolve this, you can try:
- Double-checking your entries: Ensure all information from your 1099-DIV is entered correctly.
- Using the Simplified Method: TurboTax has a simplified method for handling foreign tax credits, which might help bypass the need for Form 1116. Go through your entries when you complete the foreign tax credit and be sure to mention you elect to take the simplified method for reporting your foreign taxes.
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