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U.S. Citizens Living Outside The United States - Learn How To Stay Compliant | TaxConnections
As you know, if you have lived outside of the country most of the year, you can have up to $102,100 ($104,100 for 2018) of your income excluded from federal taxes under the Foreign Earned Income Exclusion (FEIE) (Form 2555). You can also claim a credit for taxes you paid to foreign governments, the Foreign Tax Credit (FTC) (Form 1116). Generally speaking, if your foreign tax rate is greater than your US tax rate, the FTC would be more advantageous, or else the FEIE would be more advantageous. But don’t worry. I will be there to help you determine the most advantageous way to file your taxes. In addition to these credits, it is important to establish your U.S. residence in a state which does not impose state income tax.