Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.
04-09-2017 08:21 PM
I'm using the H&R premium edition 2016. I have foreign dividends from a foreign country that are taxed there at a flat 30% rate there. I have created the form 1116 (Foreign Tax Credit) to enter that amount of taxes paid there.
Now I need to know exactly where to report the foreign dividend "income" part because I guess that even though I mention it on the form 1116 it does not get added as "income" in the income section of the return.
- Do I use a 1099-DIV entry even though the foreign country does not issue any form 1099-DIV ? I yes, there is a "foreign tax paid" box in that 1099-DIV software entry page. Should I enter the foreign tax paid there and then not even prepare a form 1116 ?
- if the 1099-DIV is not the correct place to report that income, any other place in the income section?
Thank you in advance,
04-10-2017 04:26 PM
Yes, you can enter your income in the 1099-DIV section. You can also enter the foreign taxes paid in Box 6 of the Dividend form. If the amount of foreign tax paid is less than $300 (or $600 if you are filing a joint return) you will not need to file the Form 1116. Nevertheless, if you enter it in Box 6 of the 1099-DIV you will not need to enter it again in the Form 1116 section. Doing so would result in an incorrect credit amount.
04-11-2017 02:55 AM
Thank you so much for your input.
My foreign tax amount is greater than $600 so I have also prepared form 1116. As far as the credit calculation that could be wrong if the foreign tax amount is entered in box 6 of the 1099-DIV *and* the form 1116 as well; I have tried with or without box 6 filled in but the amount of tax to pay remains the same in the end in the 1040.
In other words it seems that if box 6 is filled in with an amount greater than the $600 (in my case) then box 6 is ignored and only form 1116 is taken into consideration then.
Would that assessment make sense?
03-04-2018 02:20 PM
I am having this same issue in the 2017 Deluxe version. I have an actual foreign tax paid amount of > $600. When I key in an amount of $599 into the forms, it reduces my tax accordingly. When I enter an amount > $600, it looks like it ignores it similar to the issue reported below. It appears to be some issue with form 6251, possibly line 31.