Ask a Question
or
Create a Poll
  1. Home /
  2. Questions /
  3. Finance
  4. / Income Tax Deductions & Credits
  5. / Tax Credits In General

by AB-Answerbot on March 9th, 2007

AB-Answerbot

Question

Help answer this question below.

I am a U.S. citizen living and working overseas. Can I have a tax credit on my U.S. taxes for the taxes I pay to the foreign country?

Share:
Other

Answers. 1 helpful answer below.

  • by AB-Answerbot on March 9th, 2007

    AB-Answerbot

    The foreign tax credit is intended to relieve U.S. taxpayers of the double tax burden when their foreign source income is taxed by both the United States and the foreign country from which the income is derived.

    Generally, only income taxes paid or accrued to a foreign country or a U.S. possession qualify for the foreign tax credit. You can choose to take the amount of any qualified foreign taxes paid or accrued during the year as a foreign tax credit or as an itemized deduction.

    To choose the foreign tax credit you must generally complete Form 1116 (PDF), Foreign Tax Credit, and attach it to your Form 1040 (PDF). You may claim credit without attaching Form 1116 if all of your foreign source income is passive income (such as interest and dividends) reported to you on a payee statement and the total amount of qualifying foreign taxes you paid or accrued is not more than $300 ($600 in the case of a joint return) and is also reported to you on a payee statement. To choose the deduction, you must itemize deductions on Form 1040, Schedule A (PDF).

    You may not take either a credit or a deduction for taxes paid or accrued on income you exclude under the foreign earned income exclusion or the foreign housing exclusion. There is no double taxation in this situation because the income is not subject to U.S. tax.

    No comments. Post one | Permalink

Want to attach an image to your answer? Click here.

Did this answer your question? If not, then ask a new question or create a poll.

More Questions. Additional questions in this category.

You're reading I am a U.S. citizen living and working overseas. Can I have a tax credit on my U.S. taxes for the taxes I pay to the foreign country?

Follow us on Facebook!

Related Ads

Related Questions

Professionally Researched

ANSWERBAG BUZZ

Inland revenue united states citizen double taxation
Irs working overseas
I am a us citizen living outside of the us do i need to pay taxes
I am working and get paid overseas do i have to file a usa tax return
I am us citizen do i have to pay tax if i work outside

Answerbag

a Demand Media company