For US citizens who live and work in Canada, I often read that the best choice for US reporting is to use form 1116 to claim the foreign tax credit rather than the foreign earned income exclusion, one of the reasons being to avoid double taxation when you have other sources of income.
What if the other sources of income, both US and Canadian dividends and interest, are well below the 1040's standard deduction - is there something wrong with only using the FEIE, with Schedule B? If everything is reported and taxed 1st in Canada, won't the standard deduction reduce the amount of your taxable income to 0 in the US?
Using the FEIE with other sources of income
Moderator: Mark T Serbinski CA CPA