Question

Foreign tax carryover generated in current tax year

Forum|Forum|1 year ago
September 30, 2024
2 replies
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How do I apply a foreign tax carryover generated in the previous tax year?

Situation: Turbotax says that my current foreign tax credit is $6975 but I have $5500 from the previous year as a carryover. Is there a way I can apply part of to this year's taxes so that I can lower my current tax amount due?

TurboTax Premier Online

A

Anonymous_

Employee

No text available

P

pk12_2

Employee

@astral101 Please tell me more on the situation --- which country foreign source income, type of income ( as noted on form 1116), is your carried over foreign tax credit of the same type etc. Also a rough estimate of your world income vs Foreign source income for the year.

Generally TurboTax should automatically draw down foreign tax credit if there is insufficient foreign taxes available. But note what it is trying to do --- the allowable foreign tax credit for the year is lower of actual foreign taxes paid OR US taxes on the same doubly taxed income.

Please answer my questions and I will circle back after trying to simulate your situation ( if not obvious from your answers ).

A

astral101Author

Income country: Canada (wages; working remotely for a Canadian company while residing in the U.S.). I already paid the Canadian government almost $9,000 in taxes on approximately 51k. I cannot believe I am being taxed twice somehow.

Apart from the 51K of Canadian income, there's approximately 26k income for a married couple filing jointly.