I'm a self-employed consultant, working entirely in the U.S.
In 2023, I had a client in China that withheld a mandatory Chinese income tax from payment for the service I provided. Therefore, I went to the Foreign Taxes section (under Estimates and Other Taxes Paid) to see if I could reduce my U.S. Federal income taxes.
I found that the TurboTax instructions on this topic are confusing, because it appears to emphasize taxes paid on foreign investment income, before stating that "Foreign taxes based on foreign earned income... may also qualify for a credit."
Selecting Yes, I did pay foreign taxes in 2023 takes the user to the next screen:
Why does the program put an emphasis on reporting foreign income from Interest, Dividends, and Schedule K-1s, putting it first at the beginning and then again at the end of these instructions?
Why is the statement that the user will report taxes on income that doesn't qualify for the FEIE stuck in between those two statements?
At this point in the program, no.. I have not reported my foreign taxes, but I have reported all my income in the Business Income section. But TurboTax didn't ask if any of that income was from a foreign company, so have I "already reported my foreign income", or not? Do I select yes or no? Maybe I'm the only one, but it sure wasn't clear to me what this instruction meant.
HINT: Yes is the right answer.
