What is the Foreign Tax Credit?

The Foreign Tax Credit is an IRS exemption that expats can claim when they file their federal tax return that allows them to claim US tax credits to the same value as the foreign tax that they have already paid abroad.

Foreign Tax Credit News

The Foreign Tax Credit can only normally be applied to income sourced abroad. Expats can claim the Foreign Tax Credit by filing form 1116, or form 1118 for corporation taxes.

Is There a Foreign Income Tax Offset for US Expats?

Is There a Foreign Income Tax Offset for US Expats?

All Americans have to file a US tax return, reporting their worldwide income, including expats. This is because the US taxes based on citizenship, rather than based on residence like most other countries. This means that many Americans living abroad face the prospect of double taxation, paying income taxes both in the country where they […]

Is There a Foreign Income Tax Credit for U.S. Expats?

Is There a Foreign Income Tax Credit for U.S. Expats?

Of the more than nine million Americans who live overseas, many of them only discovered that they are required to file U.S. taxes from abroad, reporting their worldwide income, after they had moved. Millions of U.S. expats must also pay income tax in the country where they live, so the question arises of how to […]

Is There an Overseas Tax Exemption for US Expats?

Is There an Overseas Tax Exemption for US Expats?

Many expats are surprised or even shocked when they discover that they have to file US taxes from abroad. They may be paying foreign taxes where they live already, and anyway no other country (except Eritrea) requires expats to continue filing if they move abroad. While the US has tax treaties with over 100 other […]

When Should Expats Use The Foreign Tax Credit?

When Should Expats Use The Foreign Tax Credit?

The US is the only developed country in the world that taxes foreign-sourced income of non-residents. This means that US citizens (including so-called ‘Accidental Americans‘) who meet certain minimum income thresholds still have to file a US federal income tax return to declare their worldwide income if they live or earn abroad. Many Americans living abroad will […]

The American Foreign Tax Credit – What Expats Need to Know

The American Foreign Tax Credit – What Expats Need to Know

Americans working abroad have always had to worry about double taxation. US citizens and green card holders living abroad are required to report their worldwide income to the IRS, as well as pay tax in their country of residence. The same person paying the full rate of tax to two different countries on the same […]