How To Avoid Double Taxation With The Foreign Tax Credit

Double taxation on the same income in two countries is something you want to avoid. 

The Foreign Tax Credit can be used by U.S. citizens and resident aliens who pay income taxes

in foreign countries to lower their U.S. tax liability. According to the IRS, foreign taxes 

That are imposed on you by a foreign country or U.S. possession are eligible for a credit. 

There are several U.S. possessions, including Puerto Rico, the Northern Mariana Islands, Guam, 

And American Samoa. To qualify for the credit, you must have paid taxes on income, 

Such as wages, dividends, interest, royalties, war profits, and excess profits.

Form 11 is usually filed with your U.S. income tax return to claim your foreign tax as a tax credit,

And the IRS says it is often advantageous. You may also deduct the tax on Schedule A, filed with

Your Form 1040/1040-SR, if you itemize deductions. According to H&R Block,

Not all taxes on foreign income can be claimed. H&R Block describes some general conditions

That must be met before you can claim the Foreign Tax Credit on its website:

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