topic Re: Form 1116 - completing it a problem in Business & farm

Form 1116 - completing it a problem

mau69rer — Mon, 02 Mar 2020 21:24:26 GMT

Re: Form 1116 - completing it a problem

MayaD — Mon, 02 Mar 2020 21:56:34 GMT

Do you have a specific question regarding form 1116?

Where do I enter the foreign tax credit (Form 1116 ...

Re: Form 1116 - completing it a problem

bknc — Sun, 08 Mar 2020 15:38:06 GMT

Hi, I've read that you don't have to complete form 1116 if the amount of foreign taxes paid is under $300, but TurboTax Premier keeps prompting me to fill it out.

Re: Form 1116 - completing it a problem

DeanM15 — Sun, 08 Mar 2020 17:42:37 GMT

If your foreign taxes are under $300 ($600 for Married Filing Jointly) you have met one of the requirements for taking the credit without filing Form 1116. TurboTax generally must ask a series of questions to determine you are not eligible.

"You may be able to claim the foreign tax credit without filing Form 1116. This election is available only if you meet all of the following conditions.

All of your foreign source gross income was "passive category income" (which includes most interest and dividends). See c. Passive Category Income, later. However, for this purpose, passive income also includes (a) income subject to the special rule for High-taxed income described later, and (b) certain export financing interest.
All the income and any foreign taxes paid on it were reported to you on a qualified payee statement. Qualified payee statements include Form 1099-DIV, Form 1099-INT, Schedule K-1 (Form 1041), Schedule K-1 (Form 1065), Schedule K-1 (Form 1120-S), or similar substitute statements.
Your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return)."

Re: Form 1116 - completing it a problem

sandymc — Sat, 20 Feb 2021 20:58:25 GMT

Yes, I know I meet the requirements for the election to claim the credit without filing 1116, but Turbotax keeps preparing it anyway. Any way to get it to quit? Only have $7 of foreign tax and it is reported on a 1099-div. Why it is doing this? All passive. How to make it quit?

Re: Form 1116 - completing it a problem

DaveF1006 — Mon, 22 Feb 2021 01:42:44 GMT

More than likely this is an entry recorded from a 1099-DIV. If you don't wish to claim this, go to Box 8 of the 1099-DIV entry and remove it. If it is reported elsewhere, you can go to the section of your return and delete it from the form.

Re: Form 1116 - completing it a problem

euntiedt6 — Sun, 28 Feb 2021 23:32:00 GMT

Turbo tax for 2020 has a software problem that doesn’t allow you to file electronically if you are taking a foreign tax credit and filling form 1116. Tried several times, deleted the form and re-entered it, spent nearly 2 hours on the phone with customer service and no one there is able to fix the problem!

Re: Form 1116 - completing it a problem

LinaJ2020 — Mon, 01 Mar 2021 23:31:04 GMT

As of today, form 1116 is available for both e-file and paper-file. You can try to file it again or delete it first before re-enter.

If you are using the online version,

Open your return, if it's not already open.
In the upper right corner, click My Account > Tools.
In the pop-up window, select Delete a form.
Click Delete next to Form 1116 and follow the instructions to remove the form/schedule.

For year 2020, the amount would be shown on Schedule 3 line 1 and line 20 on Form 1040.

Re: Form 1116 - completing it a problem

lucymeadow — Wed, 03 Mar 2021 16:58:38 GMT

My return continues to be rejected. The reason says to check Foreign Tax source and then on a subsequent rejection it say check date. I've researched on line and found that it's an IRS issue. Other software providers claim to be working on some kind of fix. Has TT software engineers applied the patch or Fix? Last week I deleted 1116 still didn't take Please help I don't want to file by mail due to the size of my refund is over $20,000

Re: Form 1116 - completing it a problem

DaveF1006 — Mon, 08 Mar 2021 20:14:33 GMT

it depends. What I have been able to see is that there are no known issues to this. Try deleting the income and delete the 1116 from your forms and reenter the information if not updated.

go to tax tools>tools delete a form>delete 1116
If in the software, go to the forms mode and scroll down the list of forms until you see the 1116. Select it and then delete it at the bottom of the form.

Re: Form 1116 - completing it a problem

Jaytp — Mon, 15 Mar 2021 16:58:43 GMT

I tried this, deleted form 1116, and refiles and again got rejected.

Turbo tax told me to file by mail :-(.

Guess I will do that since they seem to be in no rush to fix the issue.

Re: Form 1116 - completing it a problem

MaryM428 — Mon, 15 Mar 2021 19:04:31 GMT

TurboTax is investigating this issue.

Here is a link to get information and updates

Re: Form 1116 - completing it a problem

acharliek — Mon, 10 May 2021 00:50:47 GMT

I am having a problem where turbotax is calculating my gross income from all sources as almost double my actual income. I've checked everywhere and can't find any errors. If I delete my 1099 info (stock losses) this error goes away. I reviewed the 1099 information, it's all accurate. I can't figure this out for the life of me. I've spent hours on it. Any help is greatly appreciated.

Re: Form 1116 - completing it a problem

tim s2 — Sun, 16 May 2021 02:14:25 GMT

Good partial answer. Unfortunately is does not fix turbotax or tell you how to get the program to check if you can claim the tax credit before making you enter all the information for form 1116. There is also lack of information to determine just what data / amounts to enter. For example I have Qualified dividends amounts, total dividends and income from foreign source obligations provided by a RIC relating to foreign tax and income. Some dividends show taxes paid and some do not. none provide country of origin. I did not have this issue with the 2019 version. Since I qualify for filing for the credit without filing form 1116. TurboTax should be fixed to provide a direct election/question to determine if a form 1116 is needed first. my 1099-DIV just shows a small amount of foreign tax paid. Less than the 300 or 600 limitation for claiming the credit without the form 1116.

Re: Form 1116 - completing it a problem

mefree — Mon, 18 Oct 2021 16:29:57 GMT

The problem is that TurboTax does NOT ask you these questions that @DeanM15 referenced and automatically assumes that you don't meet the conditions even if you have under $300/$600 of foreign taxes paid that were reported on 1009s from dividends and interest that were uploaded to TT. This is why @sandymc had a problem

In reality, they shouldn't even need to ask the questions because they should be able to determine whether you're exempt from completing 1116 at least 99% of the time based on the info you entered and uploaded. Instead, TT simply gives you the choice of completing 1116 or putting the FX taxes paid as an itemized deduction.. Both of these will typically result in a higher tax bill (possibly the same for some people). This error is inconsistent with their max refund guarantee.

Re: Form 1116 - completing it a problem

Turb21Tax-- — Sun, 20 Feb 2022 17:59:36 GMT

I shouldn't have to complete Form 1116 & but Turbo Tax is stating that I must file a Form 1116. I meet the exception for not having to file Form 1116. What can you do to correct this?

Re: Form 1116 - completing it a problem

AnnetteB6 — Mon, 21 Feb 2022 13:52:32 GMT

If you meet an exception to actually having to file Form 1116 in order to claim a credit for foreign taxes paid, you can still go through the Foreign Tax section of your return to complete the required information. You will see a message on the screen about Form 1116 not being finalized yet, but it is unclear whether that will prevent you from filing your return since the actual form will not be included as part of your return.

If you have attempted to electronically file your return and it has been rejected due to Form 1116, then your only alternative is to either wait until the form is available or remove the foreign tax paid (thus removing the credit) from your return.

For reference, take a look at the following TurboTax help article to see when Form 1116 is expected to be available:

IRS forms availability table for TurboTax individual (personal) tax products

@Turb21Tax--

Re: Form 1116 - completing it a problem

chiefac — Tue, 08 Mar 2022 20:05:08 GMT

Thanks for the information. Does this information apply to Turbo Tax Deluxe version? For the life of me I can

not find My Account any where in the upper right corner.

Re: Form 1116 - completing it a problem

DawnC — Tue, 08 Mar 2022 21:22:24 GMT

Yes, the foreign income and foreign tax information applies to TurboTax Deluxe as well. U.S. citizens and resident aliens must report the income they earn outside of the U.S. annually. There are, however, certain credits and exclusions you can apply to significantly reduce or eliminate your owed taxes. To avoid double taxation on Americans living abroad, the IRS gives them a choice:

Deduct their foreign taxes on Schedule A, like other common deductions.
Use Form 1116 to claim the Foreign Tax Credit (FTC) and subtract the taxes they paid to another country from whatever they owe the IRS.
Use Form 2555 to claim the Foreign Earned-Income Exclusion (FEIE), which allows those who qualify to exclude some or all of their foreign-earned income from their U.S. taxes.

In most cases, choosing the FTC will reduce your U.S. tax liability the most. Most of the time, if you paid less than $300 ($600 if married filing jointly) in total foreign taxes, you don't even need to complete Form 1116 to get the credit. Election To Claim the Foreign Tax Credit Without Filing Form 1116

Federal Individual Form Availability

@chiefac