Form 1116, Foreign Tax Credit
When comparing Quicken's Dividend tax report to 1099s, Quicken is off by the foreign tax paid on the 1099.
Foreign tax paid does not make an addition or subtraction to the shares, nor to the cash balance in an investment account. However, it is included in the Total Ordinary Dividends and the Qualified Dividends (1099-DIV box 1a and 1b) and it is also included in 1099-DIV box 6).
Box 1a (Ordinary Dividends) should include foreign tax paid.
How do I enter the foreign tax paid into Quicken?
- Create a foreign tax category (Expense) - Tax related.
- Click On Tools on the top menu bar, then select Category List.
- Click on New on the top right.
- Fill in the appropriate information, and click OK.
- Enter a Div transaction with gross amount.
- Enter a Misc Exp transaction for the security, with amount of foreign tax paid, using the foreign tax category you created.
- If downloading the data, it may come down as a misc exp. If so, fill in the category with the foreign tax category and security name.
Run a report (Invest Income), and filter it for the security name.
Run a Tax summary report to get foreign tax amount.
Because we do not currently have a tax line item for this, it will not show on the tax schedule report for export to TurboTax.