How do I file for foreign income and the 1116?

[LenaH]

To report your foreign income, please follow the steps below:

1. Open your return.
2. Search for foreign income.
3. Answer Yes for the question Did you make money outside of the US?
4. Follow the on-screen instructions.

Then, please follow the instructions below to take a credit or deduction of foreign tax paid: 

1. Select Search and search for foreign tax credit. Select the Jump to link in the search results
2. When you reach the screen Do you want the deduction or the credit? Select the option you prefer for your situation
3. If you select Take a credit:
   • Select Continue on the next screen, then select No to fill out Form 1116
   • When you reach the screen Country Summary, select Add a Country
   • Answer the questions about your foreign income, taxes, and expenses on the following screens
   • When finished, you'll be taken back to the Country Summary screen. If you have income from other countries to enter, select Add a Country. Otherwise, select Done
   • Answer the questions on the following screens until you reach your Foreign Tax Credit Summary. If you’re finished with this section, select Done
4. If you select Itemized Deduction:
   1. Enter your foreign taxes paid on the next screen. These should show up in the Deductions & Credits section of your tax return, under Other Deductible Expenses

You can either take a credit or a deduction of foreign tax paid. In most cases, taking the credit works out better than the deduction, but TurboTax will determine which is the best for your tax situation.