puravidapto
Level 8

Trust but verify.

Currently you may have 100 foreign earned income on form 1116 after exclusion, but the total tax you should enter is the total tax including the tax paid by excluded amount, so the tax could be much bigger than the income, let us say, 40,000.

On the next page, the total tax 40,000 will reduced by tax allocated to excluded amount. 

The system is kinda insane - you would not know what I am talking about if you have not done this. A better system would be that you enter the total foreign income and total tax paid in one place, then it will transfer the un-excluded amounts to form 1116. That said, I am happy to have one way to do it.

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