A taxpayer generally has the option of deducting foreign taxes paid on Schedule A or taking a foreign tax credit.

Question

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A taxpayer can choose to deduct foreign taxes paid as an itemized deduction on Schedule A or take a foreign tax credit for the amount of taxes paid to a foreign country on their U.S. tax return. The choice between the two methods depends on which one results in a greater tax benefit.

A Taxpayer Generally Has the Option of Deducting Foreign Taxes