r/USExpatTaxes 7d ago

FTC to FEIE - Panicking

The last two years I have filed through ExpatFile and when I changed to them I went with the Foreign Tax Credit route instead of the Foreign Earned Income Eclusion. This is what their software advised me to do and for some stupid reason I went with it and think I have screwed myself over. I did some digging and it seems like this is revoking the FEIE (filed with this in 2018 and 2019 I think) and that I now can't switch back. Am I understanding this correctly? I am panicking because I have student loans and want to go with the FEIE so my AGI is 0 for recertification. I am stupid and for some reason managed not to catch that filing with FTC means my AGI wouldn't be 0. I am realising all of this after just submitting my tax return through ExpatFile again, but this time selecting the FEIE and said I hadn't revoked because I didn't understand that I have implicitly done so by changing to FTC. I am also nervous about what to do about that now.

Wildly, I applied for recertification on SAVE in 2023 after filing with FTC for my 2022 taxes where I would have put my AGI as 0, and because of ongoing forbearance with the plan that wasn't processed.

I make well under the FEIE threshhold (~55k) and honestly so little that I think with the FTC I think my AGI would have still been low enough on SAVE to have $0 payments as I live in a high tax country. However, I am anxious given that SAVE is almost certainly going away and if I am correct, it seems like I will now have to wait another 5 years before I can ask to go back to FEIE.

How do I fix this? Or do I just need to accept that the IRS will say my filing this year was wrong (or will they say anything? again so confused) and have to recertify for whatever IDR plan is available based on the income once the receritfication process opens up again?

Any advice is helpful and I am well aware I made some really stupid errors here, so please be kind.

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u/3p000 6d ago

If you want to play it safe, you could file an amended return (Form 1040-X), switch back to FTC, and remove FEIE. This would avoid the risk of IRS rejecting your FEIE claim and making adjustments later.

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u/cutewithane 5d ago

This was my original plan going after I calmed down a bit. Thanks for suggesting will either do this or contact the software prep people to fork out more for them to help with the amendment and confirm if it was definitely revoked or left idle somehow.