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would you let me know where I can input foreign income(wage) and get the credit in detail on 1040 ? thanks
Hi and welcome to Just Answer!When you receive foreign wages which are not reported on W2 form - you need to prepare so-called substitute W2 form - http://www.irs.gov/pub/irs-pdf/f4852.pdfyou put explanation on the form, sign and attach that form to your tax return.Some providers doesn't allow to e-file with that form - in this case you should print and mail your tax return to the IRS.
Your foreign wages will be reported on form 1040 line 7.
How can we get the credit ? thanks
What credit do you claim?
Are you asking about foreign tax credit?
yes, I paid the tax for foreign wage.
If the same income is taxable abroad and in the US - you may claim a credit for taxes paid abroad - so the same income would not be taxed twice. Use the form 1116 -http://www.irs.gov/pub/irs-pdf/f1116.pdf please find instructions here - http://www.irs.gov/pub/irs-pdf/f1116.pdfThe credit is limited by the US tax liability on the same income - the form 1116 is used to calculate the amount of credit. Means - if tax liability abroad is higher - there will not be US taxes on that income, but if tax liability abroad is lower - in the US you will pay the difference after the credit will be applied.
When you receive foreign wages which are not reported on W2 form - you need to prepare so-called substitute W2 form -> can we input foreign wages in other income line 21 ? thanks