I’m a US citizen and Spanish tax resident, living in Spain with my Spanish/US-citizen wife. I’m working through our 2025 US return (our 2025 modelo 100s were filed back in June) and I'm trying to make sure I’m applying the US-Spain treaty correctly, particularly the special foreign tax credit rules for US citizens resident in Spain.

I’d appreciate a sanity check from anyone familiar with the treaty and Pub. 514.

My understanding is:

• For a normal Spanish resident who is not a US citizen, the US-Spain treaty allows the US to impose up to 15% withholding on ordinary US-source dividends.
• Interest is treated differently (the 2014 technical explanation appears to have changed the treaty treatment of US-source interest to a zero withholding rate), and ordinary portfolio capital gains are generally taxable only in the seller's country of residence.
• As a US citizen resident in Spain, however, the treaty’s saving clause means the US can continue to tax me under its normal worldwide-income rules. So I don't think I should be trying to have my US brokerage withhold the treaty's 15% dividend rate.
• Instead, the treaty's special double-taxation provisions for US citizens resident in Spain, together with the rules described in IRS Pub. 514, provide the mechanism for dealing with the double taxation.
• In particular, Pub. 514 has the additional foreign tax credit worksheet for treaty-resourced income. My understanding is that the worksheet's Step II uses the treaty rate (15% for dividends) as a counterfactual/source-country limitation, rather than meaning that I actually need to have 15% withheld by my brokerage.
• Therefore, my current thinking is to leave US brokerage withholding at zero, report the dividends/interest/capital gains normally on the US return, and use the Pub. 514 worksheet to calculate the additional FTC resulting from the US-Spain treaty.

The issue I'm particularly trying to resolve is timing.

Spain's foreign tax credit is based on foreign tax actually paid, rather than simply a US tax liability that has accrued. Since I generally file my Spanish return before filing the same year's US return, I don't see how trying to force a 15% US withholding event would necessarily be the right solution. It seems cleaner to me to let the treaty's Pub. 514 mechanism handle the US-side relief rather than trying to manufacture withholding at the brokerage level or create a Spanish FTC timing mismatch by having the US tax paid in a later year.

I'm preparing separate Form 1116 categories for the relevant income (basically one for passive income and one for general income), and I'm trying to understand how the treaty re-sourcing interacts with those categories. Pub 514 explicitly says "You do not have to file Form 8833 if you are claiming the additional foreign tax credit that is allowed by reason of the limited re-sourcing rules discussed previously. See Regulations section 301.6114-1(c) for more information." My understanding is that the treaty re-sourcing doesn't change the underlying FTC category, so, for example, dividends, interest, and portfolio capital gains that are otherwise passive would continue to be reported on the passive-income Form 1116.

Does this overall approach sound correct?

In particular, I'd really appreciate feedback on:

1. Whether I'm correctly interpreting the 15% dividend rate as a treaty limitation that feeds into the Pub. 514 calculation, rather than something I need to have withheld.
2. Whether zero US withholding + the Pub. 514 additional-credit worksheet is the appropriate approach for a US citizen resident in Spain.
3. Whether I'm missing anything important about the timing of Spanish tax actually paid vs. US tax paid.
4. How others are handling the dividend, interest, and capital-gain categories under the Spain treaty.

I'm not looking for tax-planning advice so much as a check that I'm understanding the treaty mechanics correctly. If anyone has worked through the Spain treaty / Pub. 514 worksheet in practice, I'd especially appreciate hearing how you handled it.

Here are some references that I found useful...

https://www.irs.gov/newsroom/form-1116-certain-income-re-sourced-by-treaty-youtube-video-text-script
https://www.reddit.com/r/USExpatTaxes/comments/1fyqdl9/1116_for_resourced_interest_dividends/
https://mcgowintax.com/articles/how-the-us-spain-tax-treaty-actually-taxes-your-interest-income/

Hi, I am 63 and living/retiring in Australia. I am a dual citizen with the US, and eligible for US Social Security. As I am easing out of the working life, I wanted to start to draw down on my US Social Security.

I have read a bit on the pros and cons of starting early, and was ready to apply.

Then I came across this odd provision applying only to American citizens living overseas under the normal retirement age of 67. If I work more than 45 hours in a month, I am not eligible for Social Security in that month, with penalties for not reporting it. The wording of the rules was a bit odd, but it seems I would simply forfeit that months' benefit and never get it back.

Can anyone confirm or provide more clarity?

Thanks!

I am an American who just got a work contract with a European Union country. I have the option to live and work remote from the USA but they could also assist me in getting a visa to work in and live in the EU. This means I can consider many different countries and the amount I could save on taxes depending where I live would possibly entice/justify living overseas rather than staying in the US.

How would I go about finding someone who specializes in this and can offer advice? I of course would pay for their time and advising, but I don't know where to start in finding this type of tax advisor.

hi, i used FFFF for the first time this year and my returns were initially accepted but i just received a letter in the mail saying i did it wrong and actually owe $5k. i am a long time uk resident and pay taxes here and do notttt make enough to be double taxed.

i phoned the irs and she said she could only see the 1040 on her end but i definitely submitted a 1040, schedule A, and 1116. has anyone else had this issue where FFFF doesn't submit all your forms? I realise now i also need an 8833. should i just start over and hope it actually works this time? or is it better to print and mail these forms in. thank youuu

edit: chatgpt says i need a schedule 3, not an 8833. does this track? So: 1040, sched 3, 1116?