DaveF1006
Expert Alumni

Deductions & credits

It depends. Are you taking the foreign income exclusion or the foreign tax credit? If you are claiming the credit, you may end up paying tax to the US, when the incomes are combined because some of your foreign tax paid may have been limited and not fully utilized. This can occur because The IRS limits the foreign tax credit you can claim to the lesser of the amount of foreign taxes paid or the U.S. tax liability on the foreign income.  

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