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A credit is allowed for foreign income taxes paid or accrued. The money is limited special part of You.S. tax due to foreign source income. It isn't refundable, but any excess credit become carried to other years to reduce tax.

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For my wife, she was paid $54,187, which she isn't taxed on for Social Security or Healthcare. My wife to put 14.82% towards her pension by law, making her federal taxable earnings $46,157.

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