Category Archives: Foreign Tax Credit

People who live and work outside the United States may be able to exclude all or part of their foreign-source wages and self-employment income from the federal income tax through a provision called the foreign earned income exclusion. To qualify for the foreign earned income exclusion, a person needs to:
•Work and reside outside the United States, and
•Meet either the Bona Fide Resident or Physical Presence tests.

Persons who qualify are eligible …

The Foreign Tax Credit is a credit given to taxpayers to help prevent double taxation.  When a taxpayer pays taxes to another country then the Foreign Tax Credit can be used to offset the taxpayers US tax liability.

The Foreign Tax Credit (FTC) is most useful for a taxpayer who live in a country with a high tax rate and therefore paid a larger percentage of taxes to …