Tax time: Turbo Tax errors reporting foreign income - Saab General Bulletin Board - Saabnet.com
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Tax time: Turbo Tax errors reporting foreign income
Posted by Dean [Email] (more from Dean) on Tue, 22 Mar 2005 15:43:51
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If you are reporting foreign income with turbo tax, it messes up form 1116. It will take the reported foreign interest income and report it as the foreign withheld tax. You will have to right click on boxes v and x to override this. And if anything has an override in it, turbo tax will not e-file and you have to send by snail mail. The same error may also occur with dividend or rents and royalties. This error would result in your taking a way too big tax credit for taxes witheld in a foreign country. The IRS might not like that.
When you report foreign income with zero tax withheld and turbo tax gives you a foreign-tax tax-credit for the amount of the income, then its pretty obviously broken.
There were no updates as of last night that will fix this and turbo tax did not know that this problem existed until today.
Expat Canadians in the USA with RRSP, LIRA or locked in RRSP must report every year under tax treaty regulations. For the first time, there is an IRS form to do this. But turbo tax missed form 8891 and you will have to google this form yourself.
If you have a foreign bank account, you need to report every year to the Treasury Department with details. But if the amounts are less than 10,000 US$, then there is a general exclusion. 10K individual or aggregate?- I don't know, you had better find that out for yourself if in that position. (If you need to report and do not, the penalties can be severe.)
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