How to File IRS Form 1116 for a Foreign Tax Credit on Compensation

For other videos on the Foreign Tax Credit and Form 1116:

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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[BasenjiRapper]

The first one to mention how to categorize taxes paid for general wages. Every other video skimmed over this central detail.

[AoyamaIchome]

This is super clear. The best video on FTC ! Thank you !

[crashoutsignal]

you have no idea how much this helped me
thank you so much

[janetperry]

Super, thank you so much. I have struggled so much on this form, I will start again with more clarity.

[ProjectsPassports]

This was helpful. Thank you! May you do a video on filing out the 1116 after taking the foreign earned income exclusion?

[eac]

Very thorough. Was able to follow you line by line.

[FeeneyAaron]

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!

[alexander-xjnn]

Whats the rationale for not allowing a credit for the full amount of the foreign taxes paid? why is it only a fraction? thanks,

[MaahlerYT]

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?

[carrie]

Great video thank you so much. I would like to know whether 1116 form has schedule A?

[carrie]

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?

[mikeagnew]

Great! Thank you!! Very easy to understand.
..

[poty]

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.

[Mrspaige]

Would there be any reason why the number in line 3e wouldn’t equal line 9 on the 1040?

[lanitalopes]

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!

[TeamLA]

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?

[WinWonder]

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.

[NishmaShah]

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?