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Can a taxpayer claim both the foreign earned income exclusion and the foreign tax credit?

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While some or all of the foreign earned income can be excluded from federal income tax, a taxpayer cannot claim both foreign earned income and foreign tax credit exclusions on the same income. If the taxpayer chooses to exclude either foreign earned income or foreign housing costs,...

Can I Take The Foreign Tax Credit?

Both the Foreign Tax Credit and Foreign Earned Income Exclusion may reduce taxes on income earned from a foreign country. The Foreign Tax Credit will reduce your tax due based on the eligible amount of tax you owe the foreign country for taxes while the Foreign Earned Income Exclusion only excludes income items for tax filing purposes.

Can Expats Claim Child Tax Credits and the FEIE? Even though they still have to file, most expats don’t end up paying any US tax though, as they claim either the Foreign Tax Credit, or the Foreign Earned Income …

When Should I Utilize The Foreign Tax Credit and When ? Firstly, as the name indicates, one can only take the foreign earned income exclusion on foreign EARNED income. As such, foreign passive income does not fall into this category.

What Is the Foreign Tax Credit and Can I Claim It ? But you can’t claim the foreign tax credit if you take either the foreign earned income or foreign housing exclusions. Since tax credits directly reduce your tax bill as opposed to your taxable income, the IRS says in most cases you’ll be better off claiming the foreign tax credit. If in doubt, run the numbers to find out which is the best

Can I claim foreign income exclusion as married person ?

I am a U.S. citizen posted in a foreign country and meet the physical presence test to qualify for foreign income exclusion tax credit; I do not believe that I qualify for the bona fide residence test. However, I am married and my spouse worked in the U.S. for more than 30 days within the same calendar year that I qualified for the physical presence test.

How to Report Foreign Earned Income on your US Tax Return? The Foreign Tax Credit. Since it is likely your foreign source income will be taxed by both the U.S. and a foreign country, there is a Foreign Tax Credit. The foreign tax credit helps to ensure that you are only taxed once on the foreign source income, but at the higher of the foreign or U.S. income tax rates on that income.

Last modified: February 05 2021

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