How Does Tax Relief Work: Difference between revisions

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A credit is allowed for foreign income taxes paid or accrued. The loan is limited certain part of Oughout.S. tax due to foreign source income. It is far from refundable, but any excess credit may be carried to other years to reduce tax.

Basically, the irs recognizes that income earned abroad is taxed via resident country, and the excluded from taxable income with the IRS if ever the proper forms are filed. The source of the income salary paid for earned income has no bearing on whether end up being U.S. or foreign earned income, but rather where do the job or services are performed (as all of the example a good employee earning a living for the Ough.S. subsidiary abroad, and receiving his salary from the parent U.S. company out in the U.S.).

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