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Deductions & credits
Yes, you can report income from several different countries if that is what you choose to do. When you prepare your foreign income credit report, you have the option to add a country in that form and then allocate your foreign amounts for each country.
My suggestion is not to report the foreign tax paid in Box 7 of the 1099 DIV entry itself but to report it directly in the FTC section. Here you can allocate the 1099 DIV income amount and the foreign tax credit paid on that income. Here are the steps.
- Go to Federal
- Deductions and credits
- Estimate and other taxes paid
- Foreign Tax Credit>start or revisit
- When it asks We just need to check if you have any uncommon situations indicate I paid foreign taxes on income I earned while working in another country.
- At some point in the interview, it will ask if you wish to take a deduction or a credit. If you are able to itemize deductions, you may consider taking the deduction.
- There will be questions in the next screen asking you the description of the Foreign Taxes paid and the amount.
- If you find that this has no effect on your tax return, you may circle-back and choose you wish to take a credit.
- Navigate and record the entries that the program asks for and when you reach the page that mentions Foreign Tax Credit Worksheet, this is where you take notice.
- The first that you will be asked is what category of income is it, you will say Passive income.
- Next screen will say Country Summary, select add a country
- When it says Other Gross Income - XXXX, Here you put in the Gross Amount you earned in that country.
- Then you will navigate through the screens until you come to a screen that says Foreign Taxes Paid - XXXX, here is where you record the amount paid under Foreign Taxes.
When you are finished, you may go back to add a country summary to add additional countries to report your additional 1099 DIV's.
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‎February 20, 2025
10:41 AM