Here is the best way to report his income.
- Go to the wages Wages & Income screen, scroll to Less Common Income.
- Click the Start/Revisit box next to Miscellaneous Income, 1099-A, 1099-C
- On the next screen, click the Start/Revisit box next to Other reportable income.
- Click the Yes box on the Any Other Taxable Income screen.
- On the next screen, enter UK-Pension as the description and then the amount.
To report the foreign tax paid.
- Go to Federal
- Deductions and credits
- Estimate and other taxes paid
- Foreign Tax Credit>start or revisit
- When it asks We just need to check if you have any uncommon situations indicate I paid foreign taxes on income I earned while working in another country.
- At some point in the interview, it will ask if you wish to take a deduction or a credit. If you are able to itemize deductions, you may consider taking the deduction.
- There will be questions in the next screen asking you the description of the Foreign Taxes paid and the amount.
- If you find that this has no effect on your tax return, you may circle-back and choose you wish to take a credit.
- Navigate and record the entries that the program asks for and when you reach the page that mentions Foreign Tax Credit Worksheet, this is where you take notice.
- The first that you will be asked is what category of income is it, you will say Passive income.
- Next screen will say Country Summary, select add a country
- When it says Other Gross Income - XXXX, Here you put in the Gross Amount you earned in that country.
- Then you will navigate through the screens until you come to a screen that says Foreign Taxes Paid - XXXX, here is where you record the amount paid under Foreign Taxes.
- Finish out the section.
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