> Getting super smart about taxes, especially by using loopholes and tax havens, can be counter-productive. Unexpected tax demands are not fun.
Sure. However, getting slightly smart about it, and not -- for example -- paying tax in a country you are demonstrably not living in, is probably a good idea.
FEIE phases out at just over $100k for singles, $200k for marrieds, and then you are taxed at the typical bracket for earnings in excess of.
Keeping things in USD for simplicity then converting at the end.
So say you live in the UK, and you + spouse earn $350k USD, UK will tax just under 40%, but lets go ahead and round it to 40%, then the US will tax the $150k at 24% to $315k and 32% to $350k.
So back of napkin calculations, your take home in the UK will be $210k and then you owe the US another $40k, making your total take home in GBP as of today, 140k.
It depends on how you are taxed, and in which country you were taxed.
The FTC only applies to taxes that are applied to YOU. So if you are set up through some Limited Company that pays out dividends or other non-PAYE scheme, YMMV.
I tried to keep it simple (overly simplistic, obviously) and specifically to the FEIE that GGP mentioned.
I'm not an international tax law expert, and I'm sure for less than the $40k in my example above you can have someone set up the proper shelters you need to limit your taxation, but the FTC
Sure. However, getting slightly smart about it, and not -- for example -- paying tax in a country you are demonstrably not living in, is probably a good idea.