How do I include foreign military pension income from Brazil?

[MelindaS1]

Yes, you need to report foreign income if you're a US citizen or resident. You'll need to report all of your income, whether it was earned in the US or abroad.

Here's how to enter your foreign income:

1. Sign in to TurboTax and open or continue your return.
2. Search for foreign income - (select the magnifying glass icon)
3. Answer Yes to Did You Make Any Money Outside the United States? and follow the onscreen instructions.

If you lived and worked in a foreign country, you might qualify for the foreign income exclusion. We'll ask questions to see if you qualify after you've entered your foreign income.

TurboTax FAQ - Do I need to report foreign income?

[pk]

@bailly , since there is NO US-Brazil Tax Treaty in effect and assuming that you are a US Person ( citizen/GreenCard/Resident for Tax Purposes):

(a) you report your Brazilian income ( pension ) generally as a "foreign pension ", no EIN/Tax id  for the  distributor. taxable amount same as  distribution amount and distribution code "normal"--"7".  This is just to satisfy the software handling of a pension.

(b) If Brazil taxes the  distribution, then  under the  "Credits and  Deductions" tab, select  "foreign tax credit and fill in the information.    You still can choose to take this burden ( foreign tax paid ) as a deduction  ( Schedule-A and under SALT limits ) or as  Foreign Tax Credit. 

(c) If you choose  Foreign Tax Credit ,  this will generally result in   Turbo walking you through filling out the form 1116 --- your Foreign pension amount being "Foreign Source income", income category "passive" and  taxes paid  being  "Foreign Taxes Paid".

(c)  Note that while TurboTax will generally recognize the whole amount of foreign taxes paid, the allowable amount is  the LESSER of actually paid and that imposed by US on the same doubly taxed income.

(d) Also note because there is no tax treaty in effect, IRS may or may not allow foreign tax credit --- this is because without a treaty a lot depends on reciprocal behavior  between the two nations.

Is there more I can do for you?

[bailly]

Thank you so much for trying to help me!

Yes I am now a US citizen and Brazilian citizen. I am having a hard time finding where to input the info you describe here:

"(a) you report your Brazilian income ( pension ) generally as a "foreign pension", no EIN/Tax id  for the  distributor. Taxable amount same as  distribution amount and distribution code "normal"--"7".  This is just to satisfy the software handling of a pension."

I can't find where to put this. I always end up with the option as listing it as "foreign earned income", which I believe is the wrong type, correct?

[pk]

@bailly , did you try following my post above, item (a) --- your pension reporting is just as if it was a US pension except  that  there is NO TAX id for the funds distributing entity.  Turbo may give you trouble with it --- some have used 23-1234567 or something similar  just to satisfy the software.

That is not working for you ?

If you are using on-line version -- I am not familiar with its screens ( and  so can ask somebody else to help ).  I use  Windows desktop  Home & Business.

Please try the steps mentioned in my post earlier and let me know if it works for you --yes ?

[bailly]

@pk, I think the issue is that I am using the online version and not the desktop software version. It is not giving me an option to input my own 1099-R. When I say I don't have a 1099-R it takes me out of inputing a pension income.

[pk]

@bailly , try telling Turbo that you have 1099-R and then enter everything as if you have a 1099-R----- the EIN for the payor may give you trouble -- just use a dummy EIN as I mentioned earlier.  That should work.