@stmichael6 , having read through ( though a bit cursorily ) and generally agreeing with both of colleagues ( @DaveF1006 and @SusanY1 ), I am somewhat surprised at your situation because I need the following information before providing a reasonable answer specific to your situation ( and not necessarily the question posed by you ) --- you are legally allowed to test different paths and choose the one that is best for you from tax liability stand point ) :
(a) assuming that you are US person ( citizen / GreenCard ) when did you arrive at the foreign country?
(b) are you working for a local entity or a whole-owned subsidiary of a US corp ?
(c) Which country are you in ?
Note
(1) that the FEIE ( Foreign Earned Income Exclusion ) is the best way to exclude US taxes on foreign income. It is better to wait and file when you meet the requirements of form 2555 ( unless of course you entered the foreign country in Nov/Dec of the Tax year.
(2) Foreign Tax Credit will at most give you credit for the US taxes levied on the income tax was also taxed by the foreign taxing authority -- no more. Any excess taxes paid to a foreign taxing authority is bank as a credit for use in future ( or one year back ) but with foreign income & tax. US can ONLY forego the tax it would have levied on the income and has nothing to do with what you paid to the foreign taxing authority ( kind of ).
Please answer my questions
Is there more one of us can do for you ?
