Avoiding Double Taxation in 2025: How Tax Treaties and Credits Can Help

One of the biggest concerns for U.S. expats is double taxation—being taxed both by the U.S. and your country of residence. Fortunately, the IRS offers several tools to help reduce your tax burden.

Use These Tools to Avoid Double Taxation

• Foreign Tax Credit (FTC): Offset taxes paid abroad dollar-for-dollar on your U.S. return.
• Tax Treaties: The U.S. has treaties with dozens of countries that dictate how specific types of income are taxed.
• Form 8833: Required when claiming a tax treaty benefit.

Real-World Example

If you pay income tax in Germany, you may qualify to deduct those payments from your U.S. tax owed using the FTC, eliminating double taxation on the same income.

Understanding how to properly apply these tools can save you thousands and ensure you stay compliant.