Difference between revisions of "Dealing With Tax Problems: Easy As Pie"

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Revision as of 11:33, 30 October 2024

A credit is allowed for foreign income taxes paid or accrued. The financing is limited certain part of You.S. tax due to foreign source income. It is far from refundable, but any excess credit could be carried to other years to reduce tax.

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Contributing a deductible $1,000 will lower the taxable income for this $30,000 annually person from $20,650 to $19,650 and save taxes of $150 (=15% of $1000). For that $100,000 per year person, his taxable income decreases from $90,650 to $89,650 and saves him $280 (=28% of $1000) - almost twice as much!

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