Many U.S. taxpayers working overseas express concern about the risk of double taxation. Tax treaties existing between the U.S. and most foreign countries provide a specific mechanism for eliminating double taxation. This mechanism grants a credit for the taxes paid in the foreign country to reduce the taxes of a resident of the country. A limited amount of the foreign income tax you pay can be credited against your U.S. tax liability. Depending on the specific situation, using a full amount available foreign tax credit may be more beneficial to the expat than using foreign income exclusion. We analyze all options and offer the best tax-saving solution for each individual client.
List Of Tax Treaties. A full list of countries which have tax treaties with the United States, and the agreements themselves, can be accessed via the Internal Revenue Service website together with technical explanations in most cases. An updated treaty has recently been negotiated with the United Kingdom.