When it comes to filing your taxes, two common terms often cause confusion: deductions and credits.

For U.S. taxpayers living abroad, two of the most common (and costly) reporting traps are FBAR (Foreign Bank Account Report, FinCEN Form 114) and FATCA (Foreign Account Tax Compliance Act, reported on IRS Form 8938).

One of the most common questions taxpayers ask each year is: “Do I really have to report this as income?”