When a taxpayer owes foreign income taxes and is also taxed by the IRS on the same income, the foreign tax credit (FTC) can be a valuable way to avoid double taxation. Tax preparers can help clients maximize FTC benefits by being knowledgeable about the rules, including qualifying taxes, claiming the FTC on Form 1116 (Individual, Estate, or Trust), and compliance issues. In some cases, the foreign earned income exclusion (FEIE) might be the better option to claim, so this course will also provide a detailed comparison between the FEIE and the FTC.
After completing this course, you will be able to:
- Identify foreign taxes that are eligible for the FTC.
- Prepare Form 1116, Foreign Tax Credit (Individual, Estate, or Trust).
- Determine whether the FTC or the foreign earned income exclusion (FEIE) is the better option for each client.
