Foreign Tax Credits

[carmanydavid]

I have earned income both in the U.S. and a foreign country.  I have also passive income from foreign countries.  Turbo tax instructs me to enter a different 1116 for both earned and passive income.  Turbo tax allows me to access the passive income form but not allow me to create a form for the earned income.  

[KarenJ2]

Have you already entered your foreign wages in TurboTax?  If so, did you enter the wages in the foreign earned income exclusion section or as a W-2?

[carmanydavid]

I have both U.S. and Foreign wages combined on my W-2.  The Foreign taxes have been filed.  I have entered this W-2 into Turbo Tax.

[KarenJ2]

Make sure you indicated on screen after the W-2 entry that you Worked outside the US.

You need to go to the foreign earned income exclusion and enter your foreign income in that section before entering the foreign tax in the foreign tax credit section. After 

When your return is open: 

1. Enter foreign earned income in the Search box at the top of the page (magnifying glass). 

2. Check the box that you have a W-2  

3. Adjust the W-2 amount so only the foreign wage amount will be considered 

4. Go through the next couple of screens and click the circle that you do want the program the so if the income qualifies for the foreign earned income  

5. Go through next couple of screen If it asks for arrival departure dates in the foreign country... enter something like 1/1/2019 to 2/1 2019 (one or two months) 

6. You do not qualify for a waiver 

7. It will finally tell you that you do not qualify for the foreign earned income exclusion (which it true)  but that they will keep your foreign income in the program and remove Form 2555 , Click continue 

8. Click Yes, and Yes  

Now your have your foreign income entered. Now you should enter your foreign tax.

[carmanydavid]

I am confused when I go into the foreign tax credit section portion.  I keyed in the relevent information and it increased my gross wages

[carmanydavid]

I did not live in the foreign country,Canada.  I traveled and returned the same week

[KarenJ2]

If you do not have any foreign tax that was paid on foreign wages, then you do not need to report your foreign source income for the week you were in Canada.  Just report your W-2 as is.

If you had a few business days in Canada, you can use any foreign tax credit carryover you have for general limitation income to help offset double taxation. 

However, if you were only in Canada a week, you will not be taxed by Canada so you have no current year foreign taxes.  If you have no foreign taxes then you have no need to report foreign income.