When running Smart Check, TT asks me to check
Form 1116 - Foreign Tax Credit Comp Wks - Paid/Accrued boxes must be entered.
It gives me these choices:
No entry
Method: Paid
Method: Accrued
The only Foreign tax I have is $6.00 for mutual fund dividend. That amount is already entered on the 1099-Div form.
I didn't have this problem last year when I had similar situation.
I'm not sure which to check. Is it the Method: paid?
Thanks
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I will suggest you to check the option "Paid".
If you have paid taxes to both foreign and the US tax authorities including taxes paid on your mutual fund, the IRS allows you to claim a foreign tax credit on your US tax return. To claim this foreign tax credit, you would need to file a Form 1116 Foreign Tax Credit. The credit will show on Schedule 3 line 1 and line 20 on Form 1040.
I will suggest you to check the option "Paid".
If you have paid taxes to both foreign and the US tax authorities including taxes paid on your mutual fund, the IRS allows you to claim a foreign tax credit on your US tax return. To claim this foreign tax credit, you would need to file a Form 1116 Foreign Tax Credit. The credit will show on Schedule 3 line 1 and line 20 on Form 1040.
Thank you. That's what I thought, but wanted to make sure.
You are welcome!
Use paid since this amount was taken from the dividends you received.
I am currently working in Puerto Rico with the Department of Defense. I have taxes taken out for Puerto Rico as I am trying to complete my federal income tax and trying to do Form 1116. It asks me if I want to do a deduction or credit. Which should I pick? And where do I place the income that I earned and the tax that I paid?
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