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Starting with the 2025 tax year, there is a new Senior Tax Deduction that provides a major tax break for those 65 and older. While it does not technically eliminate the federal tax on Social Security benefits, it is designed to significantly reduce or even cancel out the tax liability for many seniors.   TurboTax automatically applies it if you qualify.  If you are using TurboTax Online, you can check your tax summary:  1. Select Tax Tools from the left-side menu. 2. Click Tools and then select View Tax Summary 3. On the left side of the summary screen, select Preview my 1040. 4. Scroll to Form 1040, Line 13b. This is where the total from Schedule 1-A is reported.

You enter the assets for your rental property under the Rental Properties and Royalties (Sch E) section of Wages & Income.  Select Add/Edit next to Rental Properties and Royalties Select the pencil to edit the rental property (or add it) Select Add expenses or Asset by the property Check the box next to Real Estate Taxes and Continue Select the pencil next to the Real Estate Taxes to edit Enter the amount of your property taxes. Refer to the TurboTax article Where do I enter income and expenses from a rental property? For more information.  

It's not necessary to categorize it an IRA withdrawal on Form 1116. As you go through the interview questions to claim the Foreign Tax Credit, you would list this amount as Gross Income when you land on that screen asking for Gross Income.   You are correct in stating  that the foreign tax credit can only be claimed up to your US tax liability,

Your limits don't stack.  Even though you have a limit of $8550 and your spouse has a limit of $4300, your combined maximum can never be more than $8550.  The "both spouses are treated as having family coverage" means that your wife could contribute more than $4300.  But your combined maximum is still never more than the family maximum of $8550.  One or both of you need to remove an excess amount of $2400 (or $1200 each, or whatever you decide) as a "removal of excess contribution" before April 15.  Or, pay the 6% penalty and then contribute only a combined total of $8750-$2400=$6,350.00 in 2026 to use up the excess carry forward. 

I am in the same boat. I have since reach out to an attorney because turbo tax or cross river bank can not tell me anything. Only that my money is being held at cross river bank.  Every representative I've spoken with was unless and lacked any information. Each one has a different answer and blames each other.  They just lost a customer!

I just tried the SuperPatch fix, TWICE, and it did not work for me.             Windows 11 Home, on Desktop PC, with std monitor (no touch or pen)   Very frustrated, 20+ year TT user, but never encountered this issue before.