I suggest adding “Foreign-tax” per asset as a user input in the Growth Taxation page and calculate its effect on the taxes (credit for taxable account and nothing for IRA and Roth). This addition will provide more accurate tax calculation and will help the user to compare various scenarios of Asset Location.
Good idea.
One pesky complication is that each year one chooses between taking this as an itemized deduction, or as a credit (with the standard deduction, via form 1116 or schedule 3 of 1040). Taking as a credit doesn't affect MAGI and therefore ACA premiums, taking as itemized deduction of course does. I suppose Pralana can make a simplifying assumption that most users will be using the credit.
Generally itemized deduction is less beneficial than a credit: In most situations, the foreign tax credit is more advantageous because it directly reduces your U.S. tax liability dollar-for-dollar, while a deduction only reduces your taxable income.
@hecht790 Yes. I personally wouldn't be disturbed if they added just the credit not the itemized version; but let's see what they come up with when they get to it.
