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Foreign income tax exclusion question

Foreign income tax exclusion question

Old Oct 20th 2011, 1:04 am
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Default Foreign income tax exclusion question

I just have a small question about foreign income tax returns, and this may sound very silly You can apply for foreign income tax exclusion for however many years you lived in a foreign country right? As in there is no limit in how many years you can exclude your foreign income for if you qualify? Thanks!
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Old Oct 20th 2011, 3:17 am
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Default Re: Foreign income tax exclusion question

Originally Posted by lorenei View Post
I just have a small question about foreign income tax returns, and this may sound very silly You can apply for foreign income tax exclusion for however many years you lived in a foreign country right? As in there is no limit in how many years you can exclude your foreign income for if you qualify? Thanks!
Lorenei,

I moved your post to the general USA forum, since it isn't related to immigration.

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Old Oct 20th 2011, 9:33 am
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Default Re: Foreign income tax exclusion question

Originally Posted by lorenei View Post
I just have a small question about foreign income tax returns, and this may sound very silly You can apply for foreign income tax exclusion for however many years you lived in a foreign country right? As in there is no limit in how many years you can exclude your foreign income for if you qualify? Thanks!
You may receive more accurate information if you post your inquiry in the following forum:

http://talk.uk-yankee.com/index.php?board=11.0

You may claim FEIE (Foreign Earned Income Exclusion, or Form 2555) for any year in which you meet one of the two 'tests' required. You may do this for any number of years; there is no limit on the number of years you can use FEIE. If you claim FEIE for a number of years, and then stop (and use Form 1116, for example, for all general income), you can not re-start using FEIE again unless you apply to the IRS to do so (within a set period).

I imagine you already know most of this, but....if you use FTC (Foreign Tax Credits, or Form 1116) for ALL general income, and not just the income in excess of the FEIE limit (if required), you may file this for any tax year. You can not use both FTC and FEIE for the same income. Of course, if you do not use either FEIE or FTC, you will be taxed by the IRS on your foreign income.

You can also use Schedule A (Itemized deductions) to deduct foreign taxes paid, but that is definitly not the most profitable way to offset against US taxes.

When dealing with the US Tax Code, no question is silly.

Disclaimer: I am not a proffessional tax advisor, just a normal taxpayer. Anything and everything in any comment I make may be totally incorrect.
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Old Oct 20th 2011, 12:47 pm
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Default Re: Foreign income tax exclusion question

Thank you for the info and the link, it was very helpful
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