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Alan, a U.S. citizen, works in Germany and earns $70,000, paying $20,000 in German taxes. His U.S. income is $40,000 and he pays $8,000 in U.S. taxes. His U.S. taxes on his worldwide income are $22,500. What is Alan's foreign tax credit? Assume he does not qualify for the foreign-earned income exclusion.
Age Test
A criteria used in various legal and financial contexts to determine eligibility based on an individual's age.
Alimony Payments
Payments made to a spouse or former spouse under a divorce or separation agreement, qualifying as deductible for the payer in certain cases.
Head of Household Status
A tax filing status available to unmarried taxpayers who provide more than half of the support for a qualifying dependent and meet other specific IRS criteria.
Earned Wages
Compensation received from employment, including salaries, wages, tips, and other forms of payment for services rendered.
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