Foreign dividends Vanguard

[jackkgan]

TurboTax asks me the question below for Vanguard Div. Request advice on how to compute the Foreign dividends received. (Box 8 has Foreign taxes paid = x, 1a- Total ordinary dividends = y) Thank you

Foreign dividends received:

"You entered $x of foreign taxes paid. Now enter the portion of the $y dividends and distributions that was from a foreign country or U.S. possession."

These foreign dividends are from a:

Mutual Fund/Regulated Investment Company (RIC)

Other source

Since you paid foreign taxes, you may be able to claim a deduction or a credit. Just remember to go to the Estimated and Other Taxes Paid section under Deductions & Credits.

[DaveF1006]

Yes, that is a significant foreign tax paid based on foreign dividends paid. Usually, this information is on a supplemental sheet or disclosure statement that comes with your 1099 DIV or other financial tax documents sent to you by your broker. 

The foreign dividend amount is crucial so that you can claim a foreign tax credit based on the foreign dividend amount. if you can't find it on a disclosure or supplemental statement, contact the broker to see if they may have this information so you can claim your Foreign Tax Credit.

[jackkgan]

Thanks so much DaveF1006

I have 2 small follow-up questions requesting your confirmation:

1) I computed Foreign Dividends received from information in the supplement as below. Please confirm if this is accurate.

VNGRD TOTAL INTL STK ETF / [removed] / VXUS FOREIGN SOURCE INCOME PERCENTAGES
Fgn Source Inc Tot = 88.66%
 
In the Details for Dividends and Distributions for VXUS, found
Total Dividends & distributions = x

So I computed below:

Foreign Dividends y = x*(88.66/100)

I am entering y for Foreign Dividends received for that question. Is that calculation accurate?

2) Please confirm if this question is the same as the following Turbo Tax question from previous year :

Foreign-Source Income : "You reported x of total income from Vanguard Marketing Corporation Vanguard Broker" How much of that income was from foreign countries?

Thanks a lot again!

[DaveF1006 · Accepted solution]

Yes, you computed the foreign income correctly based on that percentage. This question should be the same as it was for 2023 even if the wording was slightly changed. Even then, the foreign income is computed exactly the same method even if the percentages may have differed from last year to this.

[jackkgan]

Thanks again DaveF1006

If I am understanding it right, it seems that TurboTax changed the word "Foreign Income" in 2023 to "Foreign Dividends & distributions" in 2024. I am assuming that foreign income and dividends mean the same and those 2 questions are asking for the same input with the same calculations.

2024: "You reported x of total income from Vanguard Marketing Corporation Vanguard Broker" How much of that income was from foreign countries?

2023: "You entered x of foreign taxes paid. Now enter the portion of the y dividends and distributions that was from a foreign country or U.S. possession."

[DaveF1006]

Yes, you are correct. The question is worded differently in both years but does mean the same thing even if it is confusing. I think the 2024 version might be more clarifying and that is why the wording was changed.