@DaveF1006 @SusanY1 , thanks for your help. Would appreciate further clarification on this, please.
I'm in this same situation and would like to take both the FEIE for max value, and then claim the FTC on the remainder of my UK wages.
At the start of the FTC interview, I want to make sure I understand this question right:
"Enter descriptions and amounts for any other gross income you received from sources within United Kingdom. Do NOT enter any income already reported on Form 1099-INT, Form 1099-DIV, Form 2555, or Schedules K-1."
I take this to mean 0, because I already reported the full value of my UK income for the year (~230k USD) on the Form 2555 interview. But when I proceed this way, I get a FTC of 0 and my tax bill seems to include full tax on the value of my foreign income in excess of the exclusion. If instead I enter the difference between my income and the max FEIE of 108,700, I get a FTC of ~40k that seems to prevent any extra taxes.
Therefore, can I confirm should enter the difference between my foreign income and the exclusion here, even though it says not to enter income reported on Form 2555 already?
Also, in total I paid British taxes of ~32% on my UK wages -- a higher rate than I would be charged on the same income in the states. From my reading, I was thinking I should just take the FTC and not the FEIE because of this. I also sold my US home and have a substantial capital gains taxes to pay on that transaction. My initial hope was that my FTC would far exceed the amount of US taxes charged on my foreign wages, and I could apply the excess to lower the capital gains tax, but I haven't found anyway to get this to work, possibly because the max FTC one can take is linked to the fraction of total income from foreign sources. Therefore, I'm wondering if the FTC can in theory be used to offset taxes on capital gains (home sale), or if fully eliminating US taxes on my foreign wages is the best I can hope for.
Sorry for the lengthy question, and many thanks!
