FEIE Or Foreign Tax Credit: Which One Do You Need?

Ready to make sure your situation is handled correctly? 👉 Schedule a consultation: https://onlinetaxman.com/go/wtkg If you want to read more about the FEIE vs Foreign Tax credit, check out blog here: https://onlinetaxman.com/go/gdfr — If you're an American living abroad, you've probably heard of the Foreign Earned Income Exclusion. What most videos don't tell you is that the FEIE isn't always the right tool. In some countries, using it costs you more than the alternative. There's a second, less talked about tool called the Foreign Tax Credit. And for a lot of Americans abroad — especially those living in higher tax countries — it's the better choice. In this video, I walk through exactly how to decide which one is right for you: what each tool actually does, the countries where each one clearly wins, the 3 factors that decide the messy middle, the one costly mistake people make when they switch between them, and two bonus situations where the FTC works even harder in your favor. If you're a US expat trying to figure out whether to claim the FEIE or the FTC on this year's return, this is the decision framework to run before you file. Topics covered: ✔ Foreign Earned Income Exclusion (FEIE / Form 2555) explained ✔ Foreign Tax Credit (FTC / Form 1116) explained ✔ Why the FEIE wins in low-tax countries (UAE, Panama, Hong Kong, Singapore) ✔ Why the FTC wins in high-tax countries (Germany, France, UK, Australia) ✔ The 10-year carryforward advantage of the FTC ✔ How income level, self-employment, and your 5-year plan affect the decision ✔ Why the FEIE doesn't reduce self-employment tax (and totalization agreements) ✔ The 5-year lockout rule when you revoke the FEIE ✔ Bonus: Using the FTC to claim the Child Tax Credit with US citizen dependents ✔ Bonus: How the FEIE can accidentally block your IRA contribution Want us to run this decision on your actual numbers, actual country, and actual income mix? The link at the top will get you on a call with our team. This is the kind of analysis that pays for itself many times over. ⏱ TIMESTAMPS 0:00 Why the FEIE isn't always the right tool 1:09 How each tool actually works 2:18 When the FEIE clearly wins 2:40 When the FTC clearly wins 3:33 The messy middle: 3 factors that decide it 4:54 The 5-year lockout mistake 5:49 Bonus 1: The Child Tax Credit play 6:43 Bonus 2: The IRA contribution trap 7:23 What to do next — About Online Taxman: We've spent 15+ years helping US expats and international entrepreneurs manage their US tax obligations from anywhere in the world. Over 25,000 returns filed. Clients in 182 countries. Connect with us: 🌐 https://onlinetaxman.com/ 📸 Instagram:   / onlinetaxman   💼 LinkedIn:   / online-taxman   #FEIE #ForeignTaxCredit #Form2555 #Form1116 #USExpat #ExpatTax #AmericansAbroad #InternationalTax #ChildTaxCredit #DigitalNomadTax