Two strategies for US taxpayers abroad: The Foreign Earned Income Exclusion (FEIE, IRC §911) excludes foreign earned income up to an annual limit ($132,900 for 2026; 2027-2030 are projected). The Foreign Tax Credit (FTC, IRC §901) credits foreign income taxes against US tax, up to the §904 limitation, separately by income category (§904(d)). This calculator compares the two for the same facts, with the math shown step by step. Excluded income is stacked at the top of the brackets (§911(f)), and no credit is allowed for foreign tax on excluded income (§911(d)(6)).
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Year, Filing Status & Income
Brackets, standard deduction, FEIE limit: IRC §1(j), §63(c), §911(b)(2)(D)
Rate tables: IRC §1(j)(2)(A)-(D)
Projected years only. Applied to 2026 published amounts with the statutory round-down.
Wages or self-employment income earned abroad (general category, §904(d)(2)(A)(ii))
Dividends, interest, rent from abroad. Treated as ordinary income.
IRC §904(d)(1)(C)-(D): separate limitation for each category
US wages, US investments, etc.
The larger of this or the standard deduction is used (IRC §63)
Prorates the FEIE limit (§911(b)(2)(A)); see the FEIE calculator for housing
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Foreign Taxes Paid
Creditable income taxes only (IRC §901). Not VAT, social charges, or penalties.
Tax on dividends, interest, rent, etc. (the category chosen above)
Unused general category foreign tax from prior years (IRC §904(c); 10 years forward)
Unused passive category foreign tax from prior years (IRC §904(c))
FEIE election: IRC §911(a), (e); Form 2555
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Results
Enter your information above to calculate.
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Assumptions & Sources
Assumptions & sources (parameters for the selected year)
Parameter
Value (selected year)
Status
Citation
Projected figures are estimates. Amounts labeled "Projected" are not IRS-published. They apply your assumed inflation rate to the 2026 published amounts and the statutory rounding rules, and will differ from what the IRS later announces. Do not use projected figures on a filed return.
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