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The foreign tax credit can only reduce U.S. taxes on foreign source income; it cannot reduce U.S. taxes on U.S. source income. It is generally better to take a credit for qualified foreign taxes than to deduct them as an itemized deduction.
FEIE may be more beneficial for individuals who earn relatively low amounts of foreign income and meet the eligibility requirements. On the other hand, FTC may be more advantageous for individuals who earn higher amounts of foreign income and are subject to higher foreign tax rates.
Taxpayers with a modified adjusted gross income of $80,000 or less ($160,000 or less for joint filers) are potentially eligible for the full credit and the credit is reduced ratably up for modified adjusted gross incomes up to $90,000.
Unlike FEIE, there are no restrictions on the amount of foreign income that can be used to claim FTC. However, if the foreign tax rate is lower than the U.S. tax rate, individuals might benefit more from using FEIE. When deciding between FEIE and FTC, its important to consider your individual tax situation.
You must file Form IT-203, Nonresident and Part-Year Resident Income Tax Return, if you: were not a resident of New York State and received income during the tax year from New York State sources, or. moved into or out of New York State during the tax year.
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It is possible to use both the FEIE and the FTC in the same year. But using both while in a country whose tax rate is higher than that of the U.S. is a waste of time and energy. You may pay higher taxes by using the FEIE followed by the FTC than it would have been to use the FTC alone.
Child tax credit 2023 (taxes filed in 2024) For 2023, the child tax credit is worth $2,000 per qualifying dependent child if your modified adjusted gross income is $400,000 or below (married filing jointly) or $200,000 or below (all other filers).
To clarify, you can use Form 2555 and Form 1116 on the same return, and you can use Form 2555 and Schedule A (Form 1040) on the same return; however, if you claim a deduction you cannot claim a credit and if you claim a credit, you cannot claim a deduction.

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