What is the Foreign Tax Credit?
The foreign tax credit is one of the tax breaks a US expat can claim. A foreign tax credit allows you, a taxpayer, to offset your US federal tax liability dollar for dollar! For example, if you would owe $20,000 in US federal taxes, but you also paid $20,000 (or more) in foreign income taxes, then you would be able to claim a foreign tax credit of $20,000 reducing your US federal tax liability to $0!
Read more about foreign tax credit!
| Examples | |
|---|---|
| Foreign Wages | $70,000 |
| US tax liability (over $70,000) | $20,000 |
| Less: Foreign tax Credit | $20,000 |
| US tax liability | $0 |
E-file your expat taxes in as quick as 10 minutes!
Get started