I earn 100% of my income overseas. I've been looking for a good accountant to do my taxes and came across a guy who says that due to some foreign earnings credit or foreign tax credit - I am allowed to not pay taxes on the first $88,000 (or $85,000 - don't actually remember it). And then anything over it is taxed as usual. That doesn't sound right to me. Anyone heard anything about it? Thanks for the help.
The exclusion to which you refer is the so-called "Section 911 Exclusion" for foreign earned income. For 2013, the exclusion amount is $97,600. You must meet strict qualifications for the exclusion to apply (residency or physical presence etc.) You need to hire a tax return preparer that is familiar with that foreign earned income exclusion as it requires good understanding in order for you to be sure you comply.