Question 6 10 points How may taxes paid by an individual to a foreign country be from ACCT 323 6381 at University of Maryland, University College
The requirement is to determine how taxes paid by an individual to a foreign country may be treated. Foreign income taxes paid by an individual may be deducted as an itemized deduction (not subject to the 2% floor), or may be subtracted as a credit against federal income taxes due. A is incorrect because foreign taxes can be deducted as an itemized deduction, but would not be …
The following information about geographic areas is also reported if feasible: 1) External revenues attributed to the home country and to all foreign countries, 2) Material external revenues attributed to an individual foreign country, 3) The basis for attributing revenues from external customers, and 4) Certain information about assets.
Sep 10, 2010 · Question 9 10 10 pts TCO E CPA 06884 Sams year 2 taxable income was 175000 with from ACCOUNTING ACCT-592-1 at DeVry University, Keller Graduate School of Management
File Form 1116, Foreign Tax Credit, to claim the foreign tax credit if you are an individual, estate or trust, and you paid or accrued certain foreign taxes to a foreign country or U.S. possession. Corporations file Form 1118, Foreign Tax Credit—Corporations, to claim a foreign tax credit.
If a foreign tax redetermination occurs, a redetermination of your U.S. tax liability is required in most situations. You must file a Form 1040-X or Form 1120-X. Failure to notify the IRS of a foreign tax redetermination can result in a failure to notify penalty.
Generally individual taxpayers have ten (10) years to file a claim for refund of U.S. income taxes paid if they find they paid or accrued more creditable foreign taxes than what they previously claimed.
You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U.S. possession. Generally, only income, war profits and excess profits taxes qualify for the credit. See Foreign Taxes that Qualify For The Foreign Tax Credit for more information.
Taken as a deduction, foreign income taxes reduce your U.S. taxable income. Deduct foreign taxes on Schedule A (Form 1040), Itemized Deductions. Taken as a credit, foreign income taxes reduce your U.S. tax liability. In most cases, it is to your advantage to take foreign income taxes as a tax credit. If you elect to exclude either foreign earned ...
The foreign tax credit laws are complex. Refer to Foreign Tax Credit Compliance Tips for help in understanding some of the more complex areas of the law. Below are some of the compliance issues:
If you paid or accrued foreign taxes to a foreign country or U.S. possession and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes.