I pay high U.K. tax on consulting income. Should I use Form 2555 or Form 1116 after becoming a U.S. resident?
I am a U.K. citizen who became a U.S. resident during 2025 after moving to Austin. My consulting income is still mostly from U.K. clients and the U.K. tax burden is high. One preparer suggested Form 2555 because I worked abroad for part of the year. Another said Form 1116 may be better because I already paid plenty of U.K. income tax.
The confusing part is that I do not want to waste foreign taxes or accidentally revoke something by using both incorrectly. I need the practical difference between the foreign earned income exclusion and the foreign tax credit for the same stream of income.
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