What is the taxation of foreign income?

Foreign income taxation is the taxation of the income of an individual or business that is earned in a foreign country. Under the rules of most countries, foreign income is taxed differently than domestic income. In the United States, the Internal Revenue Service (IRS) requires foreign income to be reported on US income tax returns. This includes income earned in any foreign country, as well as US source income that is treated as foreign income. The US requires separate reporting of foreign income, so that the IRS can accurately calculate taxes for individuals and businesses. In New Hampshire, foreign income is taxed according to the same principles as income earned domestically. If an individual or business is subject to tax on their income in both the US and the foreign country, then the individual or business can claim a foreign tax credit to reduce their US taxes. This credit is limited to the taxes already paid, so it does not provide a tax advantage. Foreign income can be subject to different tax rates than domestic income, depending on the individual’s or business’s tax residence. For example, the US has agreements with several foreign countries that permit a reduced rate of tax on qualifying income. In general, foreign income is taxable in the same way as domestic income in New Hampshire. It is important for individuals and businesses to always consult with a tax professional to ensure that all foreign income is reported accurately.

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What is the taxation of foreign income?

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