How Irs Form 13844 Credits 2024

Today's video, we're going to discuss the foreign tax credit, also referred to as Form 1116. If you're a US taxpayer living abroad and pay US income taxes, this video will help you prepare the form correctly and save a lot of money by optimizing taxes. Hi, I'm Patrick Evans, founder of US Tax Practice. I'm a US certified public accountant based in Switzerland, servicing US taxpayers here and in the rest of Europe. I'm in the business of helping fellow US taxpayers. Today, we're going to discuss the foreign tax credit, also referred to as Form 1116. The foreign tax credit is one of the main ways a US expat can reduce or completely eliminate their US tax burden. However, the form is relatively long, and there are some complex calculations that need to be made. Make sure you pay attention as I walk you through the form. Based on the IRS recommendations, this form will take around five hours to prepare. But after watching this video, you should be able to prepare it much quicker and more accurately. The purpose of the foreign tax credit is to take a credit for the income taxes you pay in a foreign country. Please note that this is only for income taxes and cannot be used for other types of foreign taxes, such as sales tax or wealth tax. This is very important because the IRS is getting more stringent on the filing requirements for the foreign tax credit. The first section of the form is to enter your name, identifying number, social security number, or ITIN. Below that, you need to know the type of income for which you are taking the credit. You need to prepare a separate form for each type of income. You have five choices of income category: 1. Passive category income: This...