lablue69
New Member

I earned $131000.00 in the UK and paid tax of $46,374.00 on it why am i paying more tax?

 

Retirement tax questions

Have you claimed the Foreign Tax credit for your UK taxes paid?  Both the credit for foreign taxes and the deduction for foreign taxes (if you choose it instead of the credit) are entered in the same place.

First of all, make sure you've entered all your foreign income.  Then, 

  1. From within your return, type foreign tax credit in the Search box in the upper right of your screen and select the Jump to link in the search results.
  2. Click Continue and follow the instructions.

In most cases, taking the credit works out better than the deduction. TurboTax helps you decide which one is best for you when you go through this interview.  You won't be able to take a credit or deduction for taxes paid on excluded foreign earned income or housing because excluded income and housing isn't taxed in the first place.