Choosing between a foreign tax deduction and a credit depends on your specific financial situation. Here are some key points to consider:
Foreign Tax Credit: This is generally more beneficial because it directly reduces your U.S. tax liability on a dollar-for-dollar basis. It can also be carried forward or backward to other tax years if the credit exceeds your U.S. tax liability for the year.
Foreign Tax Deduction: This reduces your taxable income, which can be helpful if you don't owe much U.S. tax or if the foreign taxes paid are relatively small. However, you must itemize deductions to claim it
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