If you are entering foreign tax on wages, if they are on a W-2 you need to first enter the W-2 in the W-2 section of TurboTax and indicate that you worked outside the US.
If you did not have
a W-2, you need to enter your UK wages under foreign earned income exclusion
section in TurboTax (enter foreign
income in the search box at the top of your screen and click the Jump to link). This will take you to
Foreign Earned Income and Exclusion under Less Common Income under Wages &
Income.
After you enter your
foreign income in this section a few screens later it will ask you, Would You
Like to Try and Exclude Your Foreign Earned Income? If you do not wish to
use the exclusion, then click NO, I know I don't qualify to exclude my income.
(Please note that if you have been using the foreign earned income exclusion in
previous years and do not use it this year, you in effect have revoked it and
cannot use it for another 5 years).
To report your foreign
taxes paid on wages for foreign tax credit:
- Click on Deductions &
Credits
- Scroll down to Estimates and
Other Taxes Paid
- Scroll down to Foreign Taxes
- Click 'Yes" you paid
foreign taxes
- Click through the screens
regarding foreign interest and dividends
- Click yes that you have
reported all your foreign income already in TurboTax
- Click that you want to take a
credit
- Answer question about the
Simplified Limitation Election
- Choose income type for wages
- it will be General category income
- Add your country name as the country
- Enter description -Foreign county wages
- Enter Income amount that you
previously reported in TurboTax
- Enter your taxes you paid on
your foreign wages in the box "Other income"
- You need to enter the Definitely Related Expenses and Other Deductions not Definitely Related
- Continue through ALL the foreign tax credit screens
until done.
According to the instructions for Form 1116, https://www.irs.gov/pub/irs-pdf/i1116.pdf
Line 2
Enter your deductions that definitely
relate to the gross income from foreign
sources shown on line 1a. For example,
if you are an employee reporting foreign
earned income on line 1a, include on
line 2 expenses such as those incurred
to move to a new principal place of work
outside the United States or supplies
you bought for your job outside the
United States.
Lines 3a and 3b
Some deductions don't definitely relate
to either your foreign source income or
your U.S. source income. Enter on lines
3a and 3b any deductions (other than
interest expense) that:
• Aren't shown on line 2, and
• Aren't definitely related to your U.S.
source income.
Line 3a. Enter the following itemized
deductions (from Schedule A (Form
1040)) on line 3a.
• Medical expenses (line 4).
• General sales taxes (line 5).
• Real estate taxes for your home
(line 6).
If you don't itemize deductions, enter
your standard deduction on
line 3a.
Line 3b. Enter on line 3b any other
deductions that don't definitely relate to
any specific type of income (for
example, the deduction for alimony paid
from Schedule 1 (Form 1040), line 31a)
