Foreign Earned Income Exclusion vs. Foreign Tax Credit: which one is better? 2

We are often asked if it’s better to use Foreign Earned Income Exclusion or Foreign Tax Credit when it comes to US expat taxes. Yet you always need to remember that each case is different and while you personally may benefit from using FEIE, then your fellow expat may have better outcome utilizing FTC.

Today we prepared this easy infographic for you, which explains the main differences and what you need to know before choosing one of the options to save money on your tax return.

 

foreign earned income exclusion, foreign tax credit

Feel free to contact us regarding your tax situation and we will come back to you within 24 hours after receiving your message.

2 thoughts on “Foreign Earned Income Exclusion vs. Foreign Tax Credit: which one is better?

  1. Reply Bev Dec 5,2017 8:09 pm

    Can I qualify for FEIE, or FTC if I live outside the US and am outside of the US for at least 330 days but my income of approximately $20,000.00 is reported to me on a U.S. 1099 as a self employed working from my home computer outside of the US?

    • Reply Olivier Wagner Dec 6,2017 5:23 am

      Yes, the reporting on a form W-2 or 1099 (or god forbid an erroneous form 1042-S) wouldn’t affect that. That said, if you can not take advantage of a social security totalization agreement, you would likely be subject to self-employment tax.

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