You will be able to report these foreign taxes paid in 2015 under the foreign tax section in TurboTax.
If you paid foreign taxes on the this transaction, you will be allowed an offset for these foreign taxes on your US tax return. If you take a foreign tax credit, your US tax liability will be reduced by the amount of taxes that you would have paid if the transaction took place in the US (see this link Claim Foreign Tax Credit). If you take a foreign tax deduction on Schedule A, you will be allowed to deduct the full amount of the foreign taxes paid but you will need to itemize (which could limit your ability to take the full deduction). The TurboTax software will help you determine which of these options will lower your overall tax liability.
To enter your foreign taxes in TurboTax Online or Desktop, please follow these steps:
- Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
- Next click on “Deductions and credits”
- Next click on "jump to full list" or “I’ll choose what I work on”
- Scroll down the screen until to come to the section “Estimates and Other Taxes Paid”
- Choose "show more", then Foreign taxes and follow the onscreen instructions. (screenshot)
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