How do I calculate my foreign tax credit from a 1099 for international dividends?

The foreign tax credit can be confusing, especially when you're trying to figure out which portions of your dividends qualify. Here's how to approach it: For mutual funds or ETFs with international holdings, the foreign portion isn't something you need to calculate yourself. The fund has already done this work for you. The "Foreign tax paid" amount of $6.28 shown on your 1099 represents taxes already withheld by foreign governments on the foreign-sourced portion of your dividends. When filing Form 1116, you'll report your foreign-source income and the foreign taxes paid. For most investors, the foreign-source income includes qualified dividends and ordinary dividends from foreign companies. The form helps you calculate the allowable credit based on the proportion of your foreign income to your total income. If your total foreign taxes paid across all investments is under $300 ($600 if married filing jointly), you might qualify to claim the credit without filing Form 1116 - you can claim it directly on Schedule 3 of your 1040.

I had a similar issue with figuring out foreign tax credits last year and discovered this amazing tool at https://taxr.ai that completely solved my problem. I uploaded my 1099s and it automatically identified all my foreign income sources and calculated exactly what I needed for Form 1116. What's really helpful is that it breaks down your foreign income by country and category, which is exactly what Form 1116 requires. The tool showed me that I was actually missing some foreign tax credits from smaller holdings I hadn't even noticed. It also explained which of my dividends were actually foreign-sourced (it's not always obvious from the 1099) and produced a report I could use for my tax preparer or software.

I want to follow up on my question about https://taxr.ai - I decided to try it after struggling with Form 1116 for weeks. I'm genuinely surprised by how well it worked! I uploaded my statements from three different brokerages and it identified all my foreign investments and broke down the taxes by country. What really helped was discovering I had unused foreign tax credits from previous years that I could carry forward - something I completely missed before. The tool produced a detailed report showing exactly what to enter on each line of Form 1116, with separate pages for each country. I actually got a larger credit than I would have with the simplified method, plus now I have documentation if I'm ever audited. Definitely worth checking out if you're dealing with foreign tax credits.

If you're struggling to reach someone at your brokerage for clarification on your foreign tax information, I'd recommend trying https://claimyr.com. I was stuck in an endless phone queue with my broker trying to get a breakdown of my foreign taxes by country, which I needed for Form 1116. I found this service that actually calls the IRS or other financial institutions for you and gets you connected to a human representative quickly. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was connected to my broker within 15 minutes (after spending hours trying on my own over several days). The rep was able to send me detailed foreign income information that wasn't clearly laid out on my 1099.

I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it anyway because I was desperate to get clarification on my foreign tax information before filing deadline. I was genuinely shocked when it worked exactly as described. After weeks of trying to get through to my broker's tax department myself (always 1+ hour wait times), I got connected in about 20 minutes. The representative helped me get a country-by-country breakdown of my foreign taxes that wasn't clear on my original documents. This made completing Form 1116 so much easier since I had the correct allocation by country. Sometimes being proven wrong is actually a good thing, especially when it saves you hours of frustration!

Everyone's talking about tools and services, but here's a simple approach I used: If your total foreign taxes aren't huge (under $300 single/$600 joint), just take the credit directly on Schedule 3 without Form 1116. The IRS allows this simplified method and it's WAY easier. I spent hours trying to figure out Form 1116 before my accountant pointed this out. The foreign tax amount on your 1099 ($6.28) is what you'd use. Unless you have foreign taxes from multiple sources that add up to more than the threshold, save yourself the headache.

Is there a way to know in advance if Form 1116 would give a better result than the simplified credit? I have about $450 in foreign taxes paid across several funds, so I'm right in the middle where either might be better.

Looking at your specific numbers, I'd recommend starting with the simplified method since your foreign tax paid is only $6.28 (well under the $300 threshold). However, there's an important detail in your post that caught my attention - you mentioned the "Ordinary Dividends" shows nothing for 2024 but $765.84 paid/adjusted in 2025 for 2024. This timing difference might affect which tax year you can claim the credit. Generally, you claim the foreign tax credit in the year the foreign taxes were actually paid or accrued, not necessarily when the dividend was received. Since your foreign tax of $6.28 was likely withheld when the dividends were paid by the foreign companies, you should be able to claim it for 2024. For your situation, just take the $6.28 credit directly on Schedule 3 (Form 1040), line 1. No need to complicate things with Form 1116 unless you have other foreign investments that push your total foreign taxes over $300. The simplified method will give you the full credit amount in your case.