A credit is allowed for foreign income taxes paid or accrued. The money is limited for that part of You.S. tax due to foreign source income. It is far from refundable, but any excess credit can be carried to other years to reduce tax. Learn important concepts before referring towards the tax rate to avoid confusion and potential errors in your computation. Initially you are looking for out is your taxable income. Obtain the result of the income for your year without the allowable deductions, ...