Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
hplj1020
Returning Member

Foreign Tax Credit Question - Other Gross Income

Hello

 

When entering the FOREIGN TAX CREDIT section under "Deductions" it comes to a line where it says: Other Gross Income and has the following description

"Do not enter any income already reported on Form 1099-INT, Form 1099-DIV, Form 2555, or Schedules K-1."

I have already entered the income in "Wages & Income" in the "Foreign Earned Income and Exclusion" category. It does not say whether I am using any of the forms listed above in this section. I am not excluding the income, so it said it would remove some 2555 forms, but it was not clear if the form is removed entirely.

Can somebody clarify if I should be listing the same number for foreign income twice (1. Under Wages > Foreign Earned Income and Exclusion and 2. Deductions & Credits > Foreign Tax Credit). 

Thanks!

2 Replies
pk
Level 12
Level 12

Foreign Tax Credit Question - Other Gross Income

@hplj1020  so are you saying that you want to take a credit for foreign taxes paid ( rather than exclude foreign earned income ) or are you saying you want to deduct the foreign taxes  and have your foreign income NOT excluded?

 

You do know that while a deduction of foreign tax is generally 100% ( to the extent limited by the new tax laws ( TCJA i.e. $10,000 ), foreign tax credit  allowed for the year is affected  by the ratio of foreign income to your world income -- so if you have US income  plus  foreign income , you will not get 100% credit for the year.

 

However, since you have entered your foreign earnings under wages  ( and not under foreign earned income and exclusion --i.e. no form 2555),  you have to enter the income as foreign income for purposes of foreign tax credit i.e. on form 1666.  You are not repeating any income  here because you do not have a form 2555 that  would have covered the same income.

 

Does that make sense ?

hplj1020
Returning Member

Foreign Tax Credit Question - Other Gross Income

@pk

 

 I think so! When I printed a summary of the forms to review, no form 2555 is included, but there is a form 1116 with the correct foreign income amount.

 

The confusing thing is that I filled out all the information for "under foreign earned income and exclusion", but then said that I don't want to try to exclude it.

 

So it makes sense that that form would not be included in the return, but TurboTax does not make it clear what forms or not are included, as that information does not get removed. By that I mean even though I said I don't want to try to exclude that info, there's still a number under "wages & income" for foreign income, even though that same number needs to be re-entered to claim the credit.


Pls let me know if I am not understanding something still. Thanks for your help!!!

 

Dynamic AdsDynamic Ads
v
Privacy Settings