What methods are available for avoiding taxation of international income?

There are a variety of methods available for avoiding taxation of international income. The most common method used by individuals, known as Foreign Earned Income Exclusion (FEIE), allows taxpayers in California to exclude a certain amount of their foreign-earned income from taxation. This exclusion is limited to a certain amount per year, currently set at around $105,900 for the 2021 tax year. This can be an effective way to reduce the amount of taxes owed on foreign earnings. Individuals who receive income from foreign sources may also be eligible for the Foreign Tax Credit. This credit is available to those who have paid foreign taxes on income to a foreign government. As long as the foreign taxes are at least equal to the amount of taxes that would be owed on the same income in California, the Foreign Tax Credit can help to reduce or eliminate any U.S. taxes owed on the foreign income. When it comes to avoiding taxes on international investments, one of the most common methods is by using a foreign trust. This type of trust allows the owner to transfer assets to a trust located in a country with a lower tax rate than that of the U.S. This can help individuals to legally avoid taxation on any income generated by these investments. Finally, U.S. citizens can also take advantage of certain tax treaties between the U.S. and foreign countries. These treaties can allow taxpayers to take advantage of special tax rules or exemptions, which can help to reduce or even eliminate taxes on certain types of international income.

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What methods are available for avoiding taxation of international income?

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