FTC (Foreign Tax Credit)

The Foreign Tax Credit (FTC) is a tax benefit that helps prevent double taxation when you earn income abroad. If you pay taxes to a foreign government on income that is also taxable by your home country, the FTC allows you to reduce your domestic tax liability by the amount of foreign taxes paid. This encourages international investment and work without unfairly penalizing taxpayers for earning income overseas. Essentially, the FTC ensures you don’t pay taxes twice on the same earnings, making your overall tax situation fairer and more manageable.