# US Expat Q: Can you elect not to do Form 1116 Foreign Tax Credit (paid foreign tax while only doing Form 2555 Foreign Earned Income Exclusion)?



## pinecrest515 (8 mo ago)

Hi, I would like to consult a quick question on tax for US expats (Americans living/working abroad).

As a US citizen/US person, suppose you lived over 330 days in calendar year in 2021 outside the US and qualify for Form 2555 Foreign Earned Income Exclusion and are a resident in a foreign country. Your foreign earned income is less than the 108700 amount, so you can pretty much exclude almost all of it using Form 2555 Foreign Earned Income Exclusion. At the same time, the total tax you paid to foreign government is more than 600 USD in 2021. Suppose that either you don't want to give up the Foreign Earned Income Exclusion for next 5 years or that the foreign country tax rate is lower than US tax rate. In this case, to avoid paperwork, can you just do Form 2555 Foreign Earned Income Exclusion and NOT have to file Form 1116 Foreign Tax Credit or Schedule A?

Clarification: I understand that it's possible to do both Form 2555 Foreign Earned Income Exclusion and then Form 1116 Foreign Tax Credit for foreign earned income amounts above 108700. But suppose again in this case, the foreign earned income is less than the 108700 amount, so tangible benefit of filing Form 1116 as well seems small and redundant (you'd have to reduce the amount excluded by Foreign Earned Income Exclusion as the same dollar amount cannot be duplicated by both Form 2555 and Form 1116).

Thank you in advance for feedback!


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## Bevdeforges (Nov 16, 2007)

There is no need to file a 1116 if you have no taxable income to apply it to. If all your earned income is covered by the 2555 exclusion, and you have no passive income on which you have paid foreign tax, then all you have to file is the 1040, 2555 and the Schedule B (to say whether or not you have foreign bank accounts that exceed $10,000 in total).


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## 255 (Sep 8, 2018)

@pinecrest515 -- The general rule is you can't file both the 2555 and the 1116, on the same income. Cheers, 255


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