Question
US Taxes Abroad question: Have any US citizens making over $120,000 figured out how to avoid double taxation on their income that goes above the $120k international tax credit?
Answers
These are the answers of Spainguru’s Facebook group members:
“Foreign Tax Credit is your friend in this case. This is distinct from the Foreign Earned Income Exclusion that has the cap.”
“The limit is $126,500 for 2024.”
“No idea, check with a tax advisor”
“Here is a link to a detailed comparison of FEIE vs. Foreign Tax Credit.“
Conclusion
The discussion indicates that US citizens earning over $120,000 while living abroad can utilize the Foreign Tax Credit to avoid double taxation on their income that exceeds the Foreign Earned Income Exclusion limit.
This strategy requires understanding the differences between these two tax mechanisms and may involve consulting with a tax professional to ensure compliance and optimal tax handling.
