Choosing the right Deduction Type for Definitely Related Expenses in Form 1116

[JAIME-TITOMALONE]

Hello Community,

I'd like to get your guidance with regards to the deduction type to select when entering Definitely Related Expenses in Form 1116.

I have calculated my expenses, but I need to choose the deduction type:

Should I choose itemized or to deduct from gross income? What are the implications of either choice?

I have noticed my Federal Due bumped up by $3,000 when I entered my expenses for this form - what can be the reason for that? Am I missing any type of adjustment?

Thanks!!

[ThomasM125]

Foreign expenses that would not qualify as itemized deductions, such as mortgage interest, property taxes, contributions, etc... would go under the "deduct from gross income" category. The other expenses I mentioned that would be reported as itemized deductions on your US tax return would be categorized as itemized deductions.

I'm not sure why your tax due would increase when you enter your foreign tax credit or deduction numbers. Perhaps you can look or your Form 1040 and schedules 1 to 3 to see what changes when you add the foreign tax information.

To view your form 1040 and schedule 1 to 3:

1. Choose Tax Tools from your left menu bar in TurboTax Online while working in your program
2. Choose Tools
3. Choose View Tax Summary
4. See the Preview my 1040 option in the left menu bar and click on it
5. Choose the Back option in the left menu bar when you are done