Turbotax, version Deluxe downloaded Windows, is having me fill out Form 1116, despite the fact that according to the IRS instructions it is not required (see below passive inc, on 1099 div, about $100). What makes this tedious and error prone is that the program has limited support for the forms, enters incorrect information in the form, leaves many required lines incomplete, and actually has me enter two different explanation forms to explain calculations the program made. I have never had to fill out Form 1116, Is this just pressure to upgrade? I am not sure I am willing to e-file this return given other problems with the program (unnecessary forms, mis-entries that need corrections). It used to be possible to use the forms in deluxe version for more detailed returns, but it seems that is ending.
From IRS requirements for 1116.
“All of your foreign source gross income was “passive category income” (which includes most interest and dividends). However, for this purpose, passive income also includes (a) income subject to the special rule described later; and (b) certain export financing interest.
All the income and any foreign taxes paid on it were reported to you on a qualified payee statement. Qualified payee statements include Form 1099-DIV, Form 1099-INT, Schedule K-1 (Form 1041), Schedule K-3 (Form 1065), Schedule K-3 (Form 1120-S), or similar substitute statements.
Your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return)”
It depends. You might be asked to fill out Form 1116 even if your foreign tax is less than $300($600 if MFJ) due to a few reasons:
To resolve this, you can try:
It depends. You might be asked to fill out Form 1116 even if your foreign tax is less than $300($600 if MFJ) due to a few reasons:
To resolve this, you can try:
My son has a small mutual fund and paid $2.69 in foreign tax. Turbo tax is demanding he upgrade to Deluxe ($39.99) just to fill out form 1116 but it is completely unnecessary. How can we eliminate this he is only 18, had AGI of $33K? Thanks for any help.