I understand that Foreign Tax Credits are an obscure aspect of tax returns that affect only a tiny minority of taxpayers, and therefore it seems fair to me that the handling this feature is limited to a premium version of the software.
But it is very confusing when my Deluxe version starts the interview, asks questions, and then suddenly drops the ball and moves to the subject without any warning and not having completed the task. I think this should be fixed. Instead of starting to process the Foreign Tax Credit, the Deluxe version should direct users to the Premiere version.
By the way, there is another thing that my Deluxe version does that may confuse taxpayers about their obligations. The program asks the user if he/she has foreign accounts worth more than $10,000, and when the answer is "Yes", it says "it sounds like your need to file" an FBAR with the FinCEN, which is correct. Then, after several additional questions, it asks the user if his/her financial assets exceed $100,000. If the answer is no, Turbo Tax replies "Based on what you told us, it turns out you don't need to report your foreign financial assets". This is highly misleading. What it means is that if your assets are for example $30,000, you have not reached the FATCA threshold of $100,000, which triggers the need to fill out Form 8938. But since you exceed $10,000, the FBAR report is still required. What the software should say is "Based on what you told us, it turns out you don't need to report your foreign financial assets to the IRS, but you may still need to file a FBAR report with the FinCEN if the combined value of your foreign accounts exceeds $10,000"
