Hello,
I will be consider as resident of India and USA for the tax year 2023. I have Indian income from the bank interest that I have to declare in USA tax return. I will be paying the taxes on this interest in India as well.
How I can avoid paying double taxes?
The article related to form 1116 on turbo tax says I don't have to fill this form is income is through interest.
Situations exist that allow you to claim the FTC without filing Form 1116, if the income concerned meets the qualifying definition.
For example:
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Your India-based interest isn't reported on a form 1099 (which is a US tax form), so you'll have to fill out form 1116 to claim a foreign tax credit, so that the interest isn't taxed twice.
@MinhT1 I am going to report interest on the form 1099 as US tax includes all the global income. In this case I have to fill form 1116?
Or I cannot report it on form 1099 and fill the form 1116?
You didn't receive form 1099-INT, but you'll report the foreign interest as if you received a form 1099-INT. And you'll fill out form 1116 to claim the foreign tax credit.
In TurboTax Online, you can enter your foreign interest by following these steps:
Also read this TurboTax article on Form 1116.
@MinhT1 thanks. I was reading the same article and found below info in the article related to foreign income through interest.
Situations exist that allow you to claim the FTC without filing Form 1116, if the income concerned meets the qualifying definition.
For example:
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