Sorry ahead of time if this question comes up a lot.
I have been living in Japan for 8 years this October and I’ve been claiming the FEIE on my taxes so my US tax liability is $0. However, my son was recently born (in April) so from next year’s taxes I *could* claim the child tax credit for him (after obtaining his SSN). I haven’t used the FTC before so I was unsure of what I should expect if I took the credit over the exemption so I could also benefit from the refundable portion of the child tax credit.
I’m sure I probably know the answer but is it better to continue using the FEIE rather than switch to the FTC? My current income is just around 4 million JPY so I don’t think the tax rates are too different between the US and Japan (at my income level that is). I am also on the Saving on a Valuable Education (SAVE) college loan repayment plan and with my taxable income as $0, I also owe $0 per month on my loans. Would switching cause my monthly payment to increase?
Thank you in advance.
by railom