Fidelity, TurboTax and foreign tax credit

[mrfeh]

Anybody here use TurboTax, have a Fidelity brokerage account and use the auto-import feature for the Fido 1099?

I ask because I learned recently that our 2019 taxes missed the foreign tax credit. And I verified that the 2020 return had the same problem, although I caught it before filing this year.

Anybody else aware of this issue? Thanks.

 

[audreyh1]

We always had to enter it manually until recently when I think the total gets entered, but we still have to enter other info manually because we have to file form 1116 to get the credit.

 

[mrfeh]

We always had to enter it manually until recently when I think the total gets entered, but we still have to enter other info manually because we have to file form 1116 to get the credit.

Is there a step in the question/answer process where this is addressed? I'm wondering if my experience is user error, or if it's a bug.

Thanks.

 

[audreyh1]

Is there a step in the question/answer process where this is addressed? I'm wondering if my experience is user error, or if it's a bug.

Thanks.

Yes, the interview process for foreign tax credit asks for the additional information, but you may have to initiate that process.

 

[Philliefan33]

I use the import function with TurboTax when available, but always check to make sure all of the information is correct by looking at the entries in the “interview” mode or following the flow of the numbers on the forms.

It’s nice not to have to do all of the entry, but worth the time to double-check the inputs.

 

[MichaelB]

Might there be a difference between versions of TT, where only the higher priced versions include the foreign tax credit in the interview process?

 

[audreyh1]

I think Deluxe worked the same as Premier on this. I’m pretty sure Deluxe also had the foreign tax credit interview process.

We only use the downloaded versions.

 

[Cobra9777]

I use TT Premier and download 1099s, etc. from Fidelity. Never had any problem with automatic import of Foreign Tax Paid. I always compare the imported numbers to a printed copy of the 1099. And then IIRC there's some required Q&A to convert the tax paid into a credit. I always have an estimate of the FTC in my tax forecast for the year. So I would definitely notice if it was missing in the final return.

Purely conjecture, but my guess would be that OP correctly imported Foreign Tax Paid from the Fidelity 1099, but did not complete the required Q&A to turn that into the FTC. I don't go through the entire TT interview process. But I selectively click-through each section where I have income, deductions, or credits... or where it's clear I have data that got imported.

 

[audreyh1]

I think that TT doesn’t tell you which specific categories you must complete - at least not the more esoteric ones. We usually click on the categories we know apply to us.

 

[GTFan]

Purely conjecture, but my guess would be that OP correctly imported Foreign Tax Paid from the Fidelity 1099, but did not complete the required Q&A to turn that into the FTC. I don't go through the entire TT interview process. But I selectively click-through each section where I have income, deductions, or credits... or where it's clear I have data that got imported.

I think this is the right answer - I use TT free version (AGI under $39k) and it imports and places FTC correctly, but you do have to answer the questions.