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Nancy, a U.S. citizen, has lived full-time in Paris for the last five years. She works for Air France. Her 2020 salary, paid in Euros,
Nancy, a U.S. citizen, has lived full-time in Paris for the last five years. She works for Air France. Her 2020 salary, paid in Euros, equaled U.S. $225,000, but Air France, not being a U.S. company, does not provide Nancy (or send the IRS) a Form W-2. Nancy asks your opinion as to whether she should choose (i) the foreign earned income exclusion or (ii) the foreign tax credit (FTC) on her 2020 Form 1040. Assume that the top tax rate in France is 45%. Explain and defend your advice to Nancy in 2-3 sentences.
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