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April 10, 2024
Question

Foreign Tax Credit - Simplified Method

  • April 10, 2024
  • 1 reply
  • 0 views

Can a Turbo Tax employee tax expert confirm a string of past postings on this topic that say a taxpayer can opt to input that they paid only $600 in foreign taxes (married couple), not their full $600+ in foreign taxes, if the taxpayer wishes to elect the Simplied Method for claiming FTC rather than completing Form 1116?

 

Of course, this election would have the consequence of forfeiting any possibility to clain aFTC for the amount of foreign taxed actually paid above the $600 limit under the Simplified Method.  So, if the actual creditable foreign taxes paid were $700, the taxpayer could opt to input just $600 when completing the Turbo Tax input worksheets.  The additional $100 of paid foreign taxes would be forfeiting as a possible tax credit for any year. i.e., this "unused" amount cannot be carried forward of back to any other tax year.  

    1 reply

    AmyC
    Employee
    April 15, 2024

    Form 1116 is not necessary when your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return).

     

    Why not fill out the form? You can follow my example  here.

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