How to make sure that all the foreign tax paid are entered into Form 1116?

[huilam1942]

I have a pension from Canada RRIF. The income was entered to the Income Part of TurboTax, but the difference is that in the entry, not like other dividend reporting, no foreign tax was entered. The foreign tax paid was only entered much later in the work sheet for Form 1116, but From 1116 does not appear to have included the foreign tax paid for my RRIF. I would like to make sure that I get all my foreign tax credits back Where and how can I see all the foreign tax paid are entered into Form 1116?

[rogge1722]

Bring up form 1116. Scroll down to Part 2 (Foreign Taxes Paid or Accrued. In the columns, you will see any taxes paid for dividends, rents, etc.  They are summed up on line 8 and then copied over to line 9 in Part 3. 

[huilam1942]

If I could get to Form 1116 to enter all the pertinent data, it will be ideal. But TurboTax does not allow us to do so.  Please tell me how to get Form 1116 in TurboTax online Premier version, to enter the date myself. 

I talked to the TurboTax Specialist and was told to enter the data as if it is a US 1099-R using Form 4852.  It also poses an issue because I have to take my Pension with a Canadian Bank as if it is a IRA in US and lumps the balance of my Traditional IRA as reported as such to IRS.  I take RMD every year based on life expectancy figure. adopted by IRS.  My Bank in Canada is doing the same, but based on the life expectancy adopted by Canada Revenue Agency which could be different than that adopted by IRS.  For future reporting to IRS on RMDs, it could be such that if the life expectancy adopted in Canada is longer than that for IRS, IRS could penalize me Thanks.for not taking sufficient RMD because IRS could treat both as US traditional IRAs.

I still believe it is best for TurboTax could fix the problem in how to include the Foreign Tax paid for pension plan from a Canadian source correctly in Form 1116.  Lumping the pension fund from a Canadian source as if it is a US IRA does not resolve the problem and could actually complicate the issue more.

If anyone knows how to I can do so, please let me know.  Thanks.  

[BarbaraW22]

Unfortunately, you cannot enter data directly into Form 1116 using the online version of TurboTax. Listed below are the steps to enter the foreign taxes paid on your retirement income. Once completed, you can preview a copy of your Form 1040 to review the amount of your foreign tax credit. The steps to preview your Form 1040 are listed at the very bottom of this post.

To enter the foreign taxes paid on your retirement income, please follow these steps:

1. Click on Deductions and Credits at the top of the screen
2. Scroll down to Estimates and Other Taxes Paid and click on Show More
3. Click on Start or Revisit next to Foreign Taxes and then select Yes
4. Select Yes to the question "Have you already reported all of your foreign income?" and then click on Continue
5. Select any applicable boxes to the question "Tell Us About Your Foreign Taxes" and then select Continue
6. Then select "Take a Credit" to the question "Do You Want the Deduction or the Credit?" Select No to the question "Do all of the following apply to your foreign income?"
7. Continue until you get to the section "Choose the Income Type" and then select the appropriate income category. Click Continue.
8. Add the country and continue through the sections, answering any applicable questions. Keep going until you get to the section "Foreign Taxes Paid" and then enter your foreign taxes and the date. (See screen shot below)

9. Continue through the sections answering any applicable questions until you get to "Foreign Tax Credit Summary" and then click Done

To preview your Form 1040 and check the amount of your Foreign Tax Credit, please follow these steps:

1. Click on "Tax Tools" from the menu on the left-hand side and then click on "Tools"
2. Click on "View Tax Summary"
3. Then click on "Preview my 1040" from the menu on the left-hand side
4. Scroll down to Schedule 3 -Additional Credits and Payments near the bottom and review the amount reported on Line 1 of Part I. (See screen shot below)
5. To return to the program, click on "Back" from the menu on the left-hand side

@huilam1942

[huilam1942]

Thanks.  That is the way to do it with the online version of TurboTax.

[Chaulk]

 I actually have on line 8 of my 1099 Div that the countries re various but later on my statement it talks about the funds as being RICs It past years I have always listed those funds as various for the 1116. I really dont know which to put. Hope it is various because otherewise I might have to ammend previous returns because I put various.

[KarenJ2]

You should not have to amend your prior year returns.  Whether you entered "various" or "RIC" as the country, they are both choices within the passive income category of Form 1116.  The tax would be calculated the same.  You should use the RIC designation this year as that is what is suggested.

From Form 1116 Instructions, page 15:

You don't need to report income passed through from a mutual fund or other regulated investment company (RIC) on a country-by-country basis. Total all income, in the applicable category, passed through from the mutual fund or other RIC and enter the total in a single column in Part I. Enter “RIC” on line i. Total all foreign taxes passed through and enter the total on a single line in Part II for the applicable category.

Because computations for inclusions under sections 951A and 965 are reported on separate forms, Form 8892, Global Intangible Low-Taxed income, and Form 965, Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System, you don’t need to report those inclusions on a country-by-country basis. For inclusions under section 965, in the applicable category, enter the total in a single column in Part l. Enter “965” on line i. For inclusions under section 951A, enter the total inclusion in a single column in Part l. Enter “951A” on line i.

[Chaulk]

Thank you. But my brokerage form lists them as "various" on line 8 of the 1099DIV.  but then they also provide in supplemental information that  they are RIC's. So I Can report them as Rics?. Thank you for helping.

[SusanY1]

Yes, you can report "Various" as RICs, even though the supplemental data is provided.  

@Chaulk

[Chaulk]

Thanks. I have it reported as various right now,is it important to redo it as RIC's? Or does it matter.

[KarenJ2]

I think you should be fine using "various" if you have already entered it this year.

[Chaulk]

 I see why you suggest  to to RICS because when one gets to filling out the state return it asks for all the capital gains of the RICS,which might make a difference in state taxes. or foreign taxes paid.

[Chaulk]

Thanks again. Oh I understand it transfers but there is an"Interest and Dividend Adjustment worksheet in the California return that asks  to isolate Capital gains on  all RICs l so  that would eliminate the various capital gains in the count.

[KarenJ2]

Thank you

[Sunbaltax]

The directions do not correspond to what I see. Under Estimates and other Taxes paid my site only shows Foreign Tax Credit and not Foreign Tax. When I click it only allows me to enter the countries for dividends. The RRIF income which I entered under IRA, 401K, Pension plan withdrawals with the foreign address and no ID for payer since the Canadian company does not have the ID that is compatible with other IRAs. I cannot find the Foreign Taxes under the Estimates and other taxes paid section. 

I have called 2 times by phone and the person is as ignorant as I am and wastes considerable time asking me to do things again and again with no clue what I had already spent several hours and could not solve. Last several years I could get the response easily on the search section but this year I only get something on CAA etc and nothing on RRIF. This reply while elaborate is not also helpful since there was no Foreign Taxes under Estimates and other Taxes paid on this site. Possibly this is for those that buy the soft ware and not those that use the internet to complete the form.

HOPEFULLY SOME ONE WILL CALL ME AT [phone number removed] OR EMAIL ME HOW TO PROCEED WITH MY ENTRY OF RRIF WITHDRAWAL AND THE TAX CREDIT. FURTHER I ALSO HAVE SOME NETHERLANDS WITHHOLDING TAX ON MY STATE PENSION PLAN THERE. I HAVE REPORTED THE INCOME AS A COMBINED ONE WITH THE US SOCIAL SECURITY PAYMENT. BUT NOT ABLE TO ENTER THE INFO FOR TAX CREDIT IN THE SAME WAY. IS THERE A DIFFERENT WAY TO ENTER THE PENSION PLAN INCOME FROM NETHERLANDS SEPARATELY AND ALSO CLAIM TAX CREDIT FOR THE WITHHOLDING TAXES THERE.