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TLAU
Level 1

Money Earned and Tax Paid outside the U.S.

I'm a resident of the U.S. but I earn song royalties that are paid in AUD to my Australian account. Taxes are taken out first. How do I account for this income and taxes paid when I lodge my U.S. tax return? Should I put in a separate tax return in Australia as well as the U.S.?

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NancyM5
Employee Tax Expert

Money Earned and Tax Paid outside the U.S.

Residents of the U.S. are required to report all world-wide income on their tax returns.  Therefore, your royalty income is entered on Schedule E of your 1040.  The taxes you pay in Australia on this same income can be include on Form 1116 - Foreign Tax Credit.   This article goes into detail about the foreign tax credit:  Claiming the Foreign Tax Credit with Form 1116 

 

TurboTax deals with U.S. income taxes, not Australian, and therefore, I'm unable to answer your last question.

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2 Replies
NancyM5
Employee Tax Expert

Money Earned and Tax Paid outside the U.S.

Residents of the U.S. are required to report all world-wide income on their tax returns.  Therefore, your royalty income is entered on Schedule E of your 1040.  The taxes you pay in Australia on this same income can be include on Form 1116 - Foreign Tax Credit.   This article goes into detail about the foreign tax credit:  Claiming the Foreign Tax Credit with Form 1116 

 

TurboTax deals with U.S. income taxes, not Australian, and therefore, I'm unable to answer your last question.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
TLAU
Level 1

Money Earned and Tax Paid outside the U.S.

Thank you so much for your response. That's really helpful. 

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