I got 3 K-1 forms for 2024, but have no idea what to do with them. Apparently info about them arrived with the downloaded tax info from Fidelity.
TurboTax H&B says that since I earned money in another country, this credit could reduce my US taxes. Apparently this is a "foreign tax credit" which I've heard of but never dealt with. It mentions the K-1 form of which I have three this year.
I checked "You have no more foreign taxes to enter other than those you've already entered on a 1099-div, 1099-int, 1099-OID, or a schedule K-1." Maybe that was incorrect but the other options seem even less likely. Then it says I have to complete form 1116 for the FTC, otherwise next option, deduction or credit. To try something I choose "take a credit" over "itemized deduction", because it sounds simpler (I don't itemize).
Next it says I have to choose the countries I earned in. None of the K-1 forms spec a country.
I have no idea what I'm supposed to do.
Thanks for any help!
edit: looking at the tax summary from fidelity, there is a foreign tax paid amount of $68. If the idea is to get a tax break on $68, and it's any trouble to implement, it'd be an option just to skip it, correct?
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Deductions and credits are optional. You may choose to ignore these entries if you believe this will not increase your taxable income. In some rare cases, the IRS may make the adjustment for you based on the K-1 copies they received.
This is a complex and tedious process, and you may consider upgrading to TurboTax Live. This online service provides step-by-step guidance from a tax expert whenever you need assistance, either over the phone or by screensharing. The time savings alone may be worth the additional cost.
OK, fair enough. Can I just ignore the issue and not try to claim the credit? Very little $ involved.
Deductions and credits are optional. You may choose to ignore these entries if you believe this will not increase your taxable income. In some rare cases, the IRS may make the adjustment for you based on the K-1 copies they received.
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