Foreign Tax Credit
Residents of foreign countries, including American expatriates, are often required to report and pay taxes on world-wide income. A resident is anyone who has been physically present for 183 days. So even though foreign earnings up to the $87,500 foreign earned income exclusion (FEIE) are excluded from US taxation, most foreign countries will tax those and other earnings of residents.
Generally when reporting foreign earnings stateside, the best advantage is to apply FEIE rather than the Foreign Tax Credit (FTC) on foreign earnings below the FEIE threshold. Once the threshold is met, FTC can then be applied against foreign taxes paid or accrued in order to avoid US taxation over $87,500. But as income rises, the complex calculations to arrive at FTC for the tax year are not always enough to fully avoid being double taxed. But for the moderately wealthy, FTC does its job 100%.