What Is Form 1116 And Who Needs To File It?When talking about US taxes and taxation of US citizens who live abroad, you may have heard of Foreign Tax Credit and the possibility to offset the US tax owing by using the taxes paid to another country. That way you can narrow the tax owing down to zero!Most of the US international tax experts prefer claiming Foreign Tax Credit (Form 1116) on client’s U.S. tax return rather than preparing form 2555 (Foreign Earned Income Exclusion), since it is more beneficial. Read further to learn why FTC is a better way to save money on your US expat taxes.Here are 5 quick facts about IRS Form 1116 and US tax returns:You claim Foreign Tax Credit on your US expat taxes by filing Form 1116. You attach this form to a Form 1040, your individual US tax return. The credit reduces your US tax liability on expat income dollar for dollar. You cannot take Foreign Tax Credit against income which you have previously excluded by the Foreign Earned Income ExclusionAnd you can’t receive a refund of foreign taxes paid through your US tax return