Question about form 1116

Hi there,

To quote an acquaintance of mine from Georgia, "I ahm kahn-FUZED" by form 1116.

I like the idea of lowering my taxable income with it, but the thing is, after filling the whole thing out, there's a line (number 19) which then asks you to insert the number from line 44 of form 1040.

The problem is, line 44 asks for taxes paid for a couple obscure things that virtually nobody has, like "Form 8814 (relating to the election to report child's interest or dividends".., so that line is zero for me. And then, form 1116 asks you to consider the lower of the amount from line 44 (zero) and line 13, which has the foreign taxes you paid.

So the lower amount is obviously zero, which defeats the entire purpose of the form. Am I missing something? I ahm kahn-FUZED!

Thanks

Line 44 is the tax on Line 43 PLUS those other misc taxes.  Have you computed the tax on line 43 yet?  Did you also compute Form 2555?  If you did, did you make the adjustment on Form 1116 box 12?

The point of the game is to get down to zero.  If your tax on line 43 is zero, you won the tax game. 

If you are using tax software, all the maths are done automatically and the carrying of data from Form X box A to Form Z box B will be done automatically.  If you are doing things by hand, it's always going to be harder, plus you can easily go awry in following the instructions without realizing you have done so.

Hi Lizzit,

Thanks for your quick response. One thing I'm still confused about is line 43/44 on the 1040. You said that line 44, whch is defined as "Tax" on the form, is line 43 plus any other line 44 items. However, line 43 is defined as "Taxable income" on the 1040...so why would we combine these two categories?

Thanks

Perhaps I wasn't entirely clear.  "Line 44 is the tax on Line 43 PLUS those other misc taxes."

By that sentance, I meant:  Line 44 is the tax THAT RESULTS FROM Line 43..."  Look up the tax that would apply to the figure shown on Line 43, and put that number on Line 44.  If you have any of the other misc. taxes, this will make the number on Line 44 larger than if you DIDN'T have any other misc taxes.

Again, if you use tax software, you don't have to understand the logic - the computer does the maths and the logic.  You would still have to read instructions, but only instructions for what to enter, not what to do with them.

Ah, thanks Lizzit! I totally see what you mean, and I appreciate your help. I've basically finished everything at this point so I'll submit and if there are problems, I'll use tax software next time around. I managed to do it last year without it, so hopefully I'll be okay. I'm in Finance so in theory I should be able to do this! 

Cheers