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mhhindal
New Member

Entering Foreign Taxes in TurboTax 2019

I have paid significant foreign taxes in 2019 - when attempting to add this in TurboTax (in the Foreign Taxes section of the Deductions & Credits section), I go through the interview questions, and eventually get to the screen where I add my country of residence (USA), the date paid (Various)  and the fact that the taxes were paid rather than accrued...after clicking on continue, I answer the question on Foreign Tax Credit carryovers (No), and then it dumps me back to the Deductions & Credits "home" summary page - I never have the chance to enter the foreign taxes paid...My foreign income is reported as part of a schedule C business...help!

12 Replies
DaveF1006
Employee Tax Expert

Entering Foreign Taxes in TurboTax 2019

It may be the way that you answer the questions in the navigational steps.  Let's see if we can help you to get to the screen to enter your foreign taxes paid.

 

 1) First of all, mention that you want to take the credit instead of the deduction as you were going through the interview.

 

 2) Next it may take you to a screen that asks if you want to take the simplified election and you will answer the question on if this is your           first year or not. if it is your first year, indicate you do not want to take the election in 2018 or previous year.

 

 3)The next screen indicate that you will select other calculation

 

 4) Continue through the screens until you get to a screen that indicates choose income type. You will indicate General Category Income.

 

 5) Next Screen Should be your country summary screen. Select add a country.

 

 6) Enter country name from the drop down

 

 7) The program will then direct you to ask the description and the amount of income earned in that country. I would suggest entering the net income from your business.

 

 😎 Deductions I would leave blank

 

 9) It will ask you if you have any foreign losses.  If you are not sure, leave blank.

 

10) The next screen says foreign taxes paid. Here you would enter the foreign taxes paid as foreign taxes on other income. Also enter the date these were paid. 

 

If you missed this navigational step, I would suggest you revisit the country summary screen and edit the country that you selected. Go through the steps that will take you to the foreign taxes paid. If you still continue to have difficulties, please call phone support so an agent can view your navigational steps with you to ensure you access the right screen to enter your foreign taxes paid.

 

 

 

 

 

 

 

 

 

 

 

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mhhindal
New Member

Entering Foreign Taxes in TurboTax 2019

Dave,

 

Thanks for your very helpful email.  Unfortunately, I never get to the Step 2 question (nor anything after that)...after choosing "Tax Credit", I next get a question on "Reporting Foreign Taxes Paid", where I click on "Continue"; then a screen entitled "No Other Income or Expenses", where I click on "Yes"; then the screen where I input my country of Residence, the date the taxes were paid, I enter that information and click on "Continue"; then the question on Tax Carryovers, where I enter "No"; then it dumps me back to the "Your 2019 Deductions & Credits" summary page...

ThomasM125
Employee Tax Expert

Entering Foreign Taxes in TurboTax 2019

If the taxes were paid with interest or dividends only, then you report them when you enter your form 1099-INT or 1099-DIV. 

 

When you enter your interest income, even if you did not receive a form 1099-INT, you will have to make and entry in that section of TurboTax (Income and Expenses, Interest and Dividends, Interest on 1099-INT). When you enter the name of the payer and the box 1 amount for the interest income received, click on the "my form has info in more than just box 1" option and you will see box 6 where you can enter your foreign tax paid. Do the same for your dividends, but enter the foreign tax in box 7.

 

That is all you have to do unless you have other foreign taxes you paid, in which case you would check "No" in the foreign tax section when asked if all of your foreign taxes are from interest and dividends.

 

[Edited 3/10/21 4:36 PM PST]

@mhhindal

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mhhindal
New Member

Entering Foreign Taxes in TurboTax 2019

Thomas - my Foreign Taxes are from income earned while working in a Foreign country, not just Interest & Dividends...

SusanY1
Employee Tax Expert

Entering Foreign Taxes in TurboTax 2019

To enter the portion of your self-employment income that was considered foreign earned income follow these steps:

 

  • Login to TurboTax.com.
  • Click on the Search Tool (magnifying glass).
  • Type in the term foreign earned income.
  • Select the Jump to link in the search results.
  • Answer Yes to the question: Did you make any money outside the U.S.?
  • On the next screen, check the box beside A Form 1099-MISC or other self-employment income.
  • Click continue and then enter the profit attributable to the foreign income.  (If all of your income was earned outside of the U.S., this is the same as your Schedule C, Line 31.)
  • Continue through the rest of this section - which is about the foreign earned income exclusion (FEIE).  
  • If you do not qualify for the exclusion, TurboTax will delete Form 2555 and indicate that you may be eligible to claim foreign tax credits instead.  If you do qualify but are electing not to use the exclusion, answer the physical presence question using dates that will disqualify you
    • Note that if you have used the FEIE in the past and qualify but do not use it this year that you will revoke your election, and you cannot use the exclusion for five (5) years without first gaining permission from the IRS.

After following these steps, you should be allowed to enter your foreign taxes paid in the foreign tax credit section.  

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TRJRG2
New Member

Entering Foreign Taxes in TurboTax 2019

Hi @SusanY1

I am in a very similar position to the previous post.  I am trying to find how to enter foreign tax on wages from a job abroad. 

 

Your instructions were generally correct.  Though, in my case, the income is from a regular foreign employer that does not provide a W-2.  Instead, I have selected "A statement from my foreign employer," as that is what I have.  From there, I've entered the income and entered incorrect dates for the Physical Residence test, as you suggest, and Form 2555 is deleted.

 

Under Estimates and Other Taxes Paid, selecting Foreign Taxes, I see

"We’ll check if you’re eligible for the Foreign Tax Credit." 

...Continue...

"Did you pay foreign taxes in 2019?"

...Yes, I paid foreign taxes this year...Continue...

 

Then I get: "You’ll need to finish adding your foreign tax payments
You haven’t entered the amount of any foreign tax payments you made.
Go to Wages & Income to enter any income you earned while working in another country and the taxes you paid. You can also enter info from your 1099-INT, 1099-DIV and K-1 forms, which includes foreign taxes paid.
Once you’re done, go to Deductions & Credits to see if you’re eligible for the Foreign Tax Credit."

 

I just can't seem to find where I can put in the foreign tax on earned income.  Any more ideas?

rogge1722
Level 9

Entering Foreign Taxes in TurboTax 2019

When you entered the foreign tax credit interview, the initial screen headers and responses should be:

1. Foreign Tax Credit

         Yes

2. Before we begin

      Yes

3. Foreign Taxes

         Continue

4. Tell us about your foreign taxes

          check mark the applicable statements then Continue

 

Is the above exactly what you saw?   If not, what exactly were the screen headers and responses until it jammed?

 

 

TRJRG2
New Member

Entering Foreign Taxes in TurboTax 2019

@rogge1722 

Thanks for your response.

The headers and responses were not as you described.  They were as I wrote previously.  At the last stage I described, I am unable to proceed in the tax credit interview.

 

However, I started over and found a solution that seems to have worked.  When entering information for foreign income and the exclusion, I opted to not try to apply the foreign earned income exclusion.  In that case, Form 2555 is never generated to begin with.  Then under Tools, I searched for the "foreign tax credit form 1116." Selecting that result, I was able to go through the process of filling out the form.  My regular foreign earned income is entered a second time as general income, "other gross income" (as opposed to being already entered on 1099s and the like).  Critically, after selecting a country, users must select "Edit" for that country's entry in order to enter the paid tax amount.  Further, for those filing jointly, I was able to enter both incomes separately, but the tax is entered as a single total amount.  Once I got through that section, everything seemed just as I expected it to be.

SusanY1
Employee Tax Expert

Entering Foreign Taxes in TurboTax 2019

Thank you for updating us all with what worked currently to get this entered for you!  

@TRJRG2 

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Klopp1
New Member

Entering Foreign Taxes in TurboTax 2019

Did you get this solved? I have exactly the same problem and can't get it to work

mhhindal
New Member

Entering Foreign Taxes in TurboTax 2019

Yes, I did get it to work...I had mis-read one of the questions and answered the question incorrectly - this prevented the program from allowing me to enter the taxes that I had paid.  I finally went back and carefully re-read the question, changed my answer, and I was able to enter the foreign taxes.

 

Good luck!

wshih
Returning Member

Entering Foreign Taxes in TurboTax 2019

Hi,

I'm preparing my return for tax year 2021 and I run into similar issue as described in the original posting. I can't find a screen that asks me to enter the foreign tax I paid in 2021.

I could only enter the taxes paid (and utilized) up to year 2020 on the Screen titled "Foreign Tax Credit Carryovers"

 

I chose not to use FEIE under the income section. I wonder if this is the reason that I could never get to the screen that asks me to enter tax paid in 2021. It doesn't make sense for TurboTax to behave this way. Could someone please tell me how I can enter tax paid in 2021? 

 

Thanks in advance!

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