How to File IRS Form 1116 for a Foreign Tax Credit on Compensation
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- Опубліковано 5 лют 2025
- For other videos on the Foreign Tax Credit and Form 1116:
How to file Schedule B of Form 1116: • How to Fill in Schedul...
How to file Form 1116: • How to File IRS Form 1...
Form 1116 and Form 1099-DIV: • IRS Form 1099-DIV with...
Form 1116 with Foreign Compensation: • How to File IRS Form 1...
Form 1116 is filed by U.S. taxpayers to report foreign source income and claim a foreign tax credit against their U.S. tax liability.
In this example, a U.S. taxpayer works in a foreign country and pays foreign income taxes. The U.S. taxpayer is also required to report those foreign source earnings on his Form 1040 and pay U.S. taxes on the same income. Form 1116 is filed to report his general category income and claim a foreign tax credit.
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This is super clear. The best video on FTC ! Thank you !
Glad it was helpful!
The first one to mention how to categorize taxes paid for general wages. Every other video skimmed over this central detail.
Glad to hear it was helpful. Thank you for the support!
you have no idea how much this helped me
thank you so much
Glad it helped. Thanks for the support!
Super, thank you so much. I have struggled so much on this form, I will start again with more clarity.
What does it mean if you get a negative number on Part I Line 7?
Also, if the tax years don't align (for example the U.K. is April - April while the U.S. is Jan - Jan), would you then use Foreign taxes accrued? Say in the U.K. example, four months of the U.S. tax year will have been paid, but the last 8 months of the year wont have been paid yet, but still have to be paid.
Thanks for your help!
This was helpful. Thank you! May you do a video on filing out the 1116 after taking the foreign earned income exclusion?
Thank you
Whats the rationale for not allowing a credit for the full amount of the foreign taxes paid? why is it only a fraction? thanks,
Very thorough. Was able to follow you line by line.
Glad it was helpful!
Excellent video, on your k2 and k3 video where do we report guaranteed payments made to foreign partner from US LLC? foreign partners are not US residents and services were provided by foreign partners outside the US.
I love this video. One question I have is what do we do if we work in countries with different tax years? I worked in the UK, for example, where the tax year is April - April. for the upcoming year jan 2023- jan 2024 do we include uk income tax from april 2022-2023?
you did a very good explanation
Would there be any reason why the number in line 3e wouldn’t equal line 9 on the 1040?
Thank you so much.
Clear and useful! Thanks!
Great video thank you so much. I would like to know whether 1116 form has schedule A?
Thank you for the great video. I would like to know whether a taxpayer needs to file both 1116 form and 2555 form? or he has to choose one of these two forms?
Excellent video. Very informative! How to fill out 1116 and 1040 if my W-2 and 1099-Div income is being taxed by a foreign county? I am a US citizen working remote for a US employer living in a foreign county. Since all income has already been included in the 1040, what do I put in box 1b at the top of form 1116?
Thank you. Why I see this foreign earned income been taxed twice? Income tax paid to foreign country, but we only claim percentage of it?
Great! Thank you!! Very easy to understand.
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Hi Jason! In my case, I have to amend my tax return including my foreign income and applying for the foreigns tax credit. Do you have any video about that? Thank you!
Great video
I'm confused by Fm 1116 line 18 instruction. I used lower Div/SG rates, but it doesn't make sense for the interior worksheet lines (2-11) to be subtracted from 1040 Line 15 which increases the size of the ratio on line 19 and so increases the threshold of allowable credit.
I would think that this section of Line 18 worksheet would increase the total to account for the discount/tax benefit received by using the Div/CG 1040 worksheet and so decrease the ratio and the threshold of the allowable credit.
Thanks, very helpful!
thank you!
My husband is working in USA and I was working in india for 6 months before moving to USA on H4 visa. We applied for double taxation in USA. We were asked to fill 1116 tax document. What documents do we have to submit for my wife's income in india for her income in india? If she has filed tax in india, will my husband get exemption in USA?
You both can file married filing jointly in 1040 and your wife's form 16 will be needed to report the income on that 1040 as well the tax that is paid in india that needs to be reported on 1116 to claim the credit.
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