Comparing the Foreign Earned Income Exclusion and the Foreign Tax Credit

Owsley, John; McKinley, John
June 2014
CPA Journal;6/ 1/2014, Vol. 84 Issue 6, p42
Academic Journal
The article offers a guide for tax advisors in the U.S. for assessing whether the Foreign Earned Income Exclusion (FEIE) or the Foreign Tax Credit (FTC) would yield greater tax savings for their clients. It explains that if a taxpayer has over 50,000 U.S. dollars from the active conduct of a trade or business overseas, or if he or she is facing high effective tax rates for his or her domestic and foreign income, the more economical option would be applying for the FTC rather than for the FEIE.


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