How the Foreign Tax Credit Works for US Expats in 2026

Lucas and Luna break down the foreign tax credit for US citizens living abroad, using a concrete example: a software engineer earning $120,000 in Germany, paying $35,000 in German income tax. They explain how Form 1116 prevents double taxation, the difference between the credit and the foreign earned income exclusion, and why high-tax countries like Germany often leave expats with a zero US tax bill. They also cover the carryover rule for unused credits and a trap around passive income. Perfect for remote workers, digital nomads, and anyone considering a move overseas. #ForeignTaxCredit #USExpats #Form1116 #DoubleTaxation #ExpatTax #Germany #ForeignEarnedIncomeExclusion #FEIE #TaxCredit #PassiveIncome #TaxCarryover #IRS #InternationalTax #DigitalNomad #TaxPlanning #Finance #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo