Call Now (800) 681-1295
Close

What is the Foreign Tax Credit (FTC)?

Table of Contents

    The foreign tax credit’s purpose is to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the U.S. and a foreign country from which the income is derived. Typically, the foreign tax credit is a dollar-for-dollar reduction for all foreign income taxes paid. However, it only reduces U.S. federal income taxes (as opposed to, e.g., employment taxes or federal excise taxes). Note also that the alternative minimum tax (AMT) has its own special FTC.

    If the foreign country taxes at a lower rate than the U.S. rate, then the taxpayer receives a full tax credit on the foreign tax. However, the taxpayer must pay the difference to the U.S. government. However, if the foreign country taxes at a higher rate than the U.S. rate, the taxpayer will not be required to pay any U.S. tax; the taxpayer will simply pay the foreign country’s tax rate.

    Tax Help Videos

    Representing Clients from U.S. and International Locations Regarding Federal and California Tax Issues

    tax lawyers

    Main Office

    Orange County
    2601 Main St. Penthouse Suite
    Irvine, CA 92614
    (949) 681-3502

    Our headquarters is located in Irvine, CA. Our beautiful 19,700 office space is staffed full-time and always available for our clients to meet with our highly qualified and experienced staff of Attorneys, Certified Public Accountants and Enrolled Agents. We also offer virtual consultations and can travel to meet with clients in one of our satellite offices.

    Outside of our 4 hour initial consultation option, we do not charge travel time or travel expenses when traveling to one of our Satellite offices, or surrounding business districts, where it is necessary to meet personally with taxing authority personnel, make court appearances, or any in person meeting deemed necessary for the effective representation of a client. To make this as flexible, efficient, and convenient as possible, David W. Klasing is an Instrument Rated Private Pilot and Utilizes the Firms Cirrus SR22 to service client’s in California and in the Southwest by air. Offices outside these areas are serviced via commercial jet airlines. None of these costs are charged to our clients.

    Satellite Offices

    California
    (310) 492-5583
    (760) 338-7035
    (916) 290-6625
    (415) 287-6568
    (909) 991-7557
    (619) 780-2538
    (661) 432-1480
    (818) 935-6098
    (805) 200-4053
    (510) 764-1020
    (408) 643-0573
    (760) 338-7035
    Arizona
    (602) 975-0296
    New Mexico
    (505) 206-5308
    New York
    (332) 224-8515
    Texas
    (512) 828-6646
    Washington, DC
    (202) 918-9329
    Nevada
    (702) 997-6465
    Florida
    (786) 999-8406
    Utah
    (385) 501-5934