Have Tax Questions? Ask a Tax Expert for Answers ASAP
Thank you for using justanswer
As long as you are sure that you are never going to be able to use the carryover, then there's no point in filing the form
Is entering 0 the same thing as not filling in a line on the tax form?
What should I enter if I do not plan to claim the carryover? Leave blank?
entering 0 on the form preserves the carryover for possible future years
If you're sure you will never use the carryover, you may stop filing the form all together
If you're tax program has the feature for notes, you may make a note re: the carryover
that is what I do (although the note does not go to the IRS)
but as a tax pro, I like to keep that information for my clients.....just in case
So you could amend to claim it?
Although in 27 years, I've only had to amend it once for that
And to be clear, to not claim it, I should leave the line blank and then have no need to fill out the form?
You may do that, or I generally just don't file the form anymore
Its a credit, not a required form
But on the 1040, the line about the foreign tax credit...should I leave it blank then (vs 0)?
That choice is up to you................and your tax program
some programs will not accept a "0"
sounds silly I know
I wanted to file my own taxes- we only get the standard deduction and have no other complications except for this from 2011. I think I just need to type in the best answer. I thought that if I type 0, I would need to file the extra form?
No...the "0" is sufficien
that tells the IRS that you no longer have a need for the 1116 form
I apologize for my spelling there
The form is only required if I am receiving credit this year or want to carryover.
But 0 does not require the form.
For a slightly different question...I would only be able to claim it in the future if I were to work in a foreign country and actually owe the US money?
I mean owe taxes (paying below US rate).
Or get soft income maybe..
There are other reasons that you could run into foreign tax
is probably the #1 reason I see other than the situation like you had when you worked in another country
Yeah- I think that will be pretty far into the future...
Thanks. This was helpful.
If you invest in mutual funds
some of them have a foreign element
It usually doesn't amount to much
and they normally withhold the foreign tax
I didn't realize they were taxed.
if they're invested overseas they will often withhold the foreign tax
but you file the 1116 to get the % back
I don't think you need to carry your credit just in case you invest in mutual funds that have holdings overseas
I just wanted you to know that there are other reasons that you may need a 1116
Thanks- good to know for the future if I ever had the credit again. And I'm interested in how this works.
how it works for mutual funds?
Well- tax code for foreign income, investing, etc
I just don't like taxes being a black box.
welcome to the club................my husband would appreciate your point of view
I didn't mean to confuse things
IF you invest in mutual funds that have foreign holdings, you are still limited to the % of foreign income vs US income....
your carryover would not help you in this situation
I just wanted to know that you could have foreign tax paid on something OTHER than wages
Okay. Yeah- I just realized that that was how the % was calculated from looking at the forms today.
your broker would provide any information you may need for future foreign taxes
Okay. Thanks for the help with the question and extra info.
You're most welcome
Please feel free to ask for me in the future if I can help you again
Okay. Have a good weekend.