topic I am due a tax credit in the US because I had to pay taxes in Italy. On Form 1116, the things that Turbo Tax is leading me through are not things I understand. in Deductions & credits

I am due a tax credit in the US because I had to pay taxes in Italy. On Form 1116, the things that Turbo Tax is leading me through are not things I understand.

barthur — Mon, 30 Sep 2019 20:49:46 GMT

I searched for info and found this:
To enter foreign tax paid:

    Open your return (if not already open).
    Click on “Take me to my return” if applicable.
    Search for "foreign tax paid" in the Search box.
    Click on the “Jump to foreign tax paid” link.
    . Answer the screen prompts.

But it doesn't work because if I use the search bar it just takes me back to the asking questions place.

Re: I am due a tax credit in the US because I had to pay taxes in Italy. On Form 1116, the things that Turbo Tax is leading me through are not things I understand.

DoninGA — Mon, 30 Sep 2019 21:06:20 GMT

To enter Foreign taxes paid -

Click on Federal Taxes (Personal using Home and Business)
Click on Deductions and Credits
Click on I'll choose what I work on (if shown)
Scroll down to Estimates and Other Taxes Paid
On Foreign Taxes, click on the start or update button

Or -

Click on Tax Tools on the left side of the screen
Click on Tools
Click on Topic Search
Enter foreign tax paid. With the result highlighted click on GO

Re: I am due a tax credit in the US because I had to pay taxes in Italy. On Form 1116, the things that Turbo Tax is leading me through are not things I understand.

barthur — Thu, 03 Oct 2019 07:23:08 GMT

OK, I will try that. Will check in here if I have any confusions. Thanks.

Re: I am due a tax credit in the US because I had to pay taxes in Italy. On Form 1116, the things that Turbo Tax is leading me through are not things I understand.

barthur — Sat, 05 Oct 2019 13:39:29 GMT

Hi, might you be able to help again? I have followed your instructions and I wish I could include a screen shot of where I am now. I am the part where it says, "Definitely Related Expenses" and I don't know what to fill out. It says, "If applicable, enter or change any other expenses that are definitely related to gross income you received from sources within Italy, the United States, or any other country from which you received income. Do not include expenses reported on Schedules K-1"

I did not receive any income in Italy but I was taxed on my savings in the US (which I guess is called passive income) which may relate to the part of the above sentence where it mentions the US. But if I were to fill out that chart, I wouldn't know what the deduction type is. I was hoping this would not be quite so involved and that I could simply state how much I had to pay in taxes in Italy, the entirely of which was based on what was in my bank account in the US. Is there some place I'll get to where I can simply fill that out?

Re: I am due a tax credit in the US because I had to pay taxes in Italy. On Form 1116, the things that Turbo Tax is leading me through are not things I understand.

barthur — Sat, 05 Oct 2019 13:41:29 GMT

Also, if I skip the section that I was talking about in my above message, I get to a place with a header: Foreign Taxes Paid - Italy Which seems to be what I want, but then it goes on to say, "Enter the total taxes paid or accrued on rental, royalty, or other income (including wages) from sources within Italy." And I did not earn ant income from within Italy. So it still is not applying to me.😦

Re: I am due a tax credit in the US because I had to pay taxes in Italy. On Form 1116, the things that Turbo Tax is leading me through are not things I understand.

DoninGA — Sat, 05 Oct 2019 14:01:33 GMT

If a section of the interview does not apply to you then leave it blank.

Where asked for Foreign Taxes on Rents and Royalties - Leave it blank

Where asked for Foreign Taxes on Other Income - Enter the amount of taxes paid on your income

Generally, the following four tests must be met for any foreign tax to qualify for the credit.

1. The tax must be imposed on you.
2. You must have paid or accrued the tax.
3. The tax must be the legal and actual foreign tax liability.
4. The tax must be an income tax (or a tax in lieu of an income tax).

Re: I am due a tax credit in the US because I had to pay taxes in Italy. On Form 1116, the things that Turbo Tax is leading me through are not things I understand.

barthur — Sat, 05 Oct 2019 14:04:51 GMT

Thanks so much! I managed to get myself to that point. Now I am being asked by Turbo Tax to enter "any adjustment to my gross income". I don't know if I should be entering something. I thought Turbo Tax would figure that out for me.

It seems to relate to what "form" (such as Form 1040EZ) I am using.

I don't know which form I am using. I imagine that Turbo Tax has chosen one for me. I know that if it is the 1040EZ that I would NOT claim any adjustments to income.

I suppose I am being asked about AGI because I filled in foreign taxes paid? I have no idea what if anything I should fill in here.😮

Re: I am due a tax credit in the US because I had to pay taxes in Italy. On Form 1116, the things that Turbo Tax is leading me through are not things I understand.

DoninGA — Sat, 05 Oct 2019 14:15:53 GMT

Answered in the new message you posted. Please keep your messages on your original post otherwise there can be a confusion of replies from the other members of the forum