Foreign income reporting and tax credit in step by step turbo tax desktop

[Rav Rast]

Why turbo Tax does not have foreign Tax reporting and Tax credit in Step by Step mode? I can access only through form mode form 1116.  We need to fix it. I am using TT Premium.  Thanks.

[pk]

@Rav Rast , what type of foreign source income ?  Which country ?  Are you a US person ( citizen/GreenCard/ Resident for Tax Purposes )?  If the foreign Taxes paid is  for dividend/interest income and reported on 1099s , you may be able to get a better outcome by using  safe harbor ( simplified method  and not form 1116 ).

Obviously I am answering in generalities because I need the questions ( I asked ) answered  to be specific.

Note that while the downloaded version all have all the forms available, the step-by-step interviews cover  only progressively more as one goes up the scale i.e.  Home & Business covers  up to the most complex  situations.

While I am most familiar with the screens for H& B,  I cannot comment on the Premier functionality.  Therefore , please tell me what you are trying to do and /or not being able to do.  Why did you have to go to forms mode  ?

I will circle back , when I hear form you --yes?

[Rav Rast]

I am US citizen and I only have <$500 interest  from India. I already paid taxes in India on it. 

[pk]

@Rav Rast  if the interest has been reported on a 1099- INT,   or a broker's consolidated  report etc. then you can easily take advantage of  safe harbor treatment.  You report the   foreign source income as usual and  the  foreign taxes paid at the same time.   Then when you go to Deductions and Credits tab,  select foreign tax credit.  TurboTax will ask you if you want deduction  ( that will work only if you are using itemized deduction ) or credit.  Choose credit and everything should work out.

If you reporting  foreign interest income and  foreign tax thereon from a financial entity / bank in India directly ( i.e. no 1099-INT ), then you pretty much follow the same path for reporting the interest income   ( there is no EIN for the  financial entity/ bank ) and then  report  the foreign  tax essentially the same way.  This should result in TurboTax allowing you to use the safe harbor  amount applicable to your filing status.  At worst and depending on the amount of  foreign tax, you may have to fill out a form 1116, which generally limits the allowable credit to lesser of actual amount paid  to India  and US tax on the same doubly taxed  foreign income.

Hope this helps.

Is there more I can do for you ?