I paid ~$450 taxes in Germany already. In Turbotax I filed for a tax credit of $450 for this. But t I still pay ~$550 taxes in the US.
Am I missing something?
If the dividends are ordinary dividends then they are taxed at your regular income tax rate. Only qualified dividends are taxed at a favorable rate (entered in box 1b on 1099-DIV). You might want to check if the dividends you received meet the requirements to be qualified dividends. Please see 2020 Publication 550 Page 19 for details.
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Besides income tax, that 'extra' income could affect other things on your tax return, such as reducing some credits or deductions.
Just because you paid $450 in tax to Germany and claimed the Foreign Tax Credit on your US return does NOT necessarily mean it reduced your taxes by $450. It calculation is more complex than that, so you can look at Form 1116 to see how that works and the actual credit that you received.
Thank you Dana!
Iiuc, the german dividends do meet the requirements to be qualified dividends.
On the page you linked it explains that a foreign corporation is a qualified foreign corporation if it meets any of the following conditions (and condition #2 is met because Germany is listed in table 1-3).
1. The corporation is incorporated in a U.S. possession.
2. The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Department of the Treasury determines is satisfactory for this purpose and that includes an exchange of information program. For a list of those treaties, see Table 1-3.
3. The corporation does not meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. See Readily tradable stock, later.