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Learning, Sharing, and Teaching => Taxes => Topic started by: Travis on February 29, 2020, 09:29:49 PM

Title: H&R Block software - Foreign Tax Credit
Post by: Travis on February 29, 2020, 09:29:49 PM

The software is asking me a bunch of new questions that I'm not understanding and the result is it isn't allowing me to claim the credit.  Anyone else run into this problem?

Edit: entering the international dividends as "income" on the online worksheet spits out a credit of $584 of the $612 in foreign taxes I paid.  Does that sound right?

Title: Re: H&R Block software - Foreign Tax Credit
Post by: RWD on February 29, 2020, 10:15:34 PM

I'm guessing your foreign taxes are too high to claim without using Form 1116?
https://forum.mrmoneymustache.com/taxes/form-1116-what-a-nightmare-any-tips-on-how-to-handle-this/

Title: Re: H&R Block software - Foreign Tax Credit
Post by: Travis on March 01, 2020, 02:22:17 AM

Quote from: RWD on February 29, 2020, 10:15:34 PM

I'm guessing your foreign taxes are too high to claim without using Form 1116?
https://forum.mrmoneymustache.com/taxes/form-1116-what-a-nightmare-any-tips-on-how-to-handle-this/

Just barely over. The limit on using the 1040 is $600 MFJ.  Instead of a Form 1116, the software just asks you questions and spits out an answer.  It was not intuitive and it feels like I faked my way through it to get the result I was looking for.  I put it up here for consideration just to be sure I'm doing it right.  In previous years when I was below that threshold I received the entire tax back as a credit, but now it's only a fraction. The IRS instructions for the form aren't terribly helpful either.

Title: Re: H&R Block software - Foreign Tax Credit
Post by: MustacheAndaHalf on March 03, 2020, 05:52:12 AM

I'm also using H&R Block, and also taking foreign tax credit.  I think the software automatically checked a box for "foreign income"... when I tried to un-check it, I got a warning saying the software will calculate it automatically.. so, okay.

I later got a question "did I use the simplified method" for calculating foreign income.  It's this odd situation where you pick once, and are stuck with the answer forever.  If you didn't see that question, maybe you didn't check the "foreign income" box, and didn't do the questions that guided me to fill out form 1116.

The most annoying thing is having a "total international" mutual fund, and being asked "which country".  Fortunately there's an option at the bottom "RIC" which stands for "(R)egistered (I)nvestment (C)ompany".  If you had mutual funds, you want to pick "RIC" for company.  And then that you're reporting passive income.

Hope that helps with the H&R Block tax interview.