Foreign Source Income

[jf4evr]

I have foreign tax paid on various Schwab accounts (i.e. small company, International, etc). In the 1099s, they list out the individual countries, foreign tax paid and dividends received.

Box 7 list total foreign tax paid and Box 8 lists various for sources. I listed all the countries, then for each country, TurboTax notes I reported box 1a total income and asks how much of this income was from foreign countries? TurboTax then list “foreign source income” that was prefilled with the total foreign tax paid for all countries of the account.  Shouldn’t this have the dividend income for the individual country and not the foreign tax paid?  Unlike Vanguard, Schwab does not provide any additional info for source details.

[MaxA1]

Schwab 1099 statements do a pretty bad job of clearly stating the Foreign dividend amounts in their statements.  You can find the total foreign dividends paid towards the end of the Schwab 1099-COMP, but in order for you to get the Foreign qualified dividends portion, you will have to total it up on your own by going to the qualified dividend details, also within the 1099-COMP document.

Additionally, instead of listing out each foreign country, you can choose "RIC" as your country.  RIC stands for Regulated Investment Company, meaning that the foreign taxes were paid through a brokerage or investment account.  This will save you time and it'll simplify the foreign tax credit section of your return.

[jf4evr]

I have one account where it lists RIC plus a few additional countries. I can combine all into one RIC?  Then just add up the “qualified dividends” to input as foreign source income, correct? 

[DaveF1006]

Yes, this is correct. You don't have to add these up yourself.  The program will do this for you.