foreign tax paid? how do i report this and where do i get the most benefit from this?

Answer 1

Line 47 of form 1040 for eligible amounts - you might have to fill out form 1116 also.

Answer 2

You are entitled to either a credit or deduction for foreign income taxes paid. You claim a credit by completing form 1116 and entering the credit on the appropriate line in your tax calculation. You claim a deduction by entering the taxes on Schedule A. Generally, the credit is more valuable because it reduces tax dollar for dollar. In some special situations, the credit is not allowed (e.g. your foreign source taxable income is zero). Consult your tax advisor for more detail.