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Chronicles of Tax Advisors

It's Never Too Late to Claim Your Foreign Tax Credit

Posted by Dave Motes Posted on Oct 06 2015

The foreign tax credit offers substantial tax savings when it is calculated properly. Sure, there are many twists and turns in the calculation of the foreign tax credit. If done properly, however, it can substantially reduce or even eliminate your personal income tax liability, and it can work against even self-employment tax. Normally, if you are a small business owner, the credit will not reduce any self-employment tax calculated on your profit. If you are working in a country with a ‘totalization agreement’, however, even self-employment tax can also be substantially reduced or eliminated.

In one case, we had an individual visit our office who had worked most of her three prior three years in various foreign countries. She had paid substantial foreign income tax to those foreign countries. By careful application of the tax law, we were able to generate refunds for her of over $100,000 for the years 2012 and 2013. We see an even larger tax refund for her for 2014.

Many taxpayers who pay substantial foreign tax yet fail to fully take advantage of the credits available for them in any given year don’t realize they can AMEND their tax returns as far back as ten years. This means that taxpayers can go back TEN years and capture all the refunds they are due. At Tax Advisors, we put our expertise at work for you and make sure you receive all the refunds you are entitled to.  


Dave Motes, CPA

Authorized to practice before the Internal Revenue Service

A Certified Public Accountant (CPA) is a federally authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audit, collections, and appeals. 



Disclaimer: The information in this blog is for general informational and educational purposes only, including any comments provided by blog visitors. All stories described are accounts of actual experience with actual clients of Tax Advisors. Postings are not solicitations or legal advice. This information is not intended to create and receipt of it does not constitute an agent-client relationship. The reader should not rely or act upon any information in this site without seeking professional legal counsel or advice from his or her tax professional.