I have two 1099-DIV form with Foreign tax paid. Should I take it as a deduction or credit? I will be itemizing deductions on my return.

[GeoffreyG]

Generally speaking, claiming a foreign tax credit is better than claiming a foreign tax deduction.  The simple reason here is basic math.  A tax credit of any kind represents a dollar-for-dollar reduction in your income tax liability, whereas a tax deduction just reduces the dollar amount of your income that is subject to being taxed.  Thus, a single $1 tax credit is worth exactly $1 toward your overall tax liability, while a $1 tax deduction is only worth ($1 x your marginal income tax rate) toward your tax liability.

So, where a taxpayer has a choice to make, it's usually better to claim a credit than a deduction, if they can do so.

We also have some TurboTax articles on the foreign tax credit that you may find both helpful and interesting.  Here are a pair of courtesy links to those:

https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/Filing-IRS-Form-1116-to-Claim-the-Fo...

https://ttlc.intuit.com/questions/1901623-where-do-i-enter-the-foreign-tax-credit-form-1116-or-deduc...

Thank you for asking this important question.

[clivtx]

Why does TT ask the user to make the decision instead of figuring out which reduces the tax the most?

Given that the foreign source income entry is non-trivial, maybe it could give the choice as "just take the deduction" or "allow me to enter information for TT to decide."