Foreign Tax Credit: Your Guide to the Form 1116

Form 1116 foreign tax credit is a non-refundable credit based on the tax payable to foreign countries. Consider, for instance, a U.S. citizen abroad who never filed a tax return. If they are working in a foreign country, their form 1040 is likely going to contain substantial foreign income. Well, paying both the U.S. and foreign tax on the same money is counter-intuitive. Hence why the final tax liability will reflect a reduction based on the tax already deemed payable to the foreign country…

Leave a Reply

Your email address will not be published. Required fields are marked *