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How do I address “Foreign tax paid” and "Foreign income" in my tax return or tax software?

In the Dividends and Distributions section of your Form 1099, you may have a values in boxes 6 & 7: “Foreign tax paid” and the corresponding “Foreign country or US possession.” These values represent foreign taxes that were paid as a result of dividends you received from ETFs like VEA or VWO, which hold a broad range of foreign securities representing many countries. As such, in most cases clients enter “Various” when prompted for the country to which the foreign tax was paid, unless they need to break down the taxes paid on a per-country basis (not common).

These foreign taxes paid may make you eligible for a foreign tax credit/deduction when you file your tax return. Details for each dividend received can be found in the Dividend & Distribution Details section towards the end of your Form 1099. Your tax preparer or tax software should be able to provide additional guidance on this topic.

If your tax software asks for foreign income/foreign source amount, you can get this information from your 1099(s). 

Apex Clearing Corporation 1099

If you have a 1099 from Apex Clearing Corporation, you can view the 1099 DIV section of the form 1099.  If there is a number entered in the column titled "Foreign Taxes Paid," you can look to the column to the left of that number to see a total amount for the line item.  If you sum up each total amount number where there is a foreign tax paid, you can get a total number for "income/foreign source" amount.  

For example, below is a screenshot from part of a hypothetical 1099 from Apex Clearing Corporation.  In this case, the "foreign income/foreign source amount" is $3.22.  This is determined by adding $2.78 and $.44 together - each of those total amounts had numbers entered in the foreign tax paid column. 

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Wealthfront Brokerage 1099

If you have a Wealthfront 1099, then you have to sum the “Total Dividends & distributions” amounts that had any foreign taxes withheld under the Detail for Dividends and Distributions section of your 1099. 

For example, here is a screenshot from part of a hypothetical 1099 from Wealthfront Brokerage Corporation. In this case, the "foreign income/foreign source amount" is $82.52.  This is determined by added the $70.54 to the $11.98 because each of those numbers has a line item titled "Total Foreign tax withheld" line item. 

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Both an Apex Clearing Corporation 1099 and a Wealthfront Brokerage 1099

If you have both an Apex 1099 and a Wealthfront 1099 you will have to sum both amounts as detailed above from your Apex Clearing Corporation 1099 and your Wealthfront Brokerage 1099. In the examples above, you would add the $3.22 to the $82.52 for a total of $85.74.

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