Can I File Both Form 2555 and Form 1116 (for different sources of income)?

I am filing form 2555-EZ  to exclude my salary in the UK from my taxable income. My total salary is less than $87,600, so it will all be excluded.

I have reported gross (pre-tax) interest income on my UK bank accounts as taxable income. As it is not earned income, I did not include it on form 2555-EZ. Can I report this as passive income on form 1116, and take a credit for the tax that I already paid on it in the UK?   On form 1116, I would only list my interest income (as passive income), and not mention my salary at all, except for line 2e where it asks for gross income from all sources.

Can I do a mixture of form 2555-EZ for earned income and form 1116 for passive income, or would I have to use form 1116 for everything? My salary was much higher than the interest I earned in the UK last year, and if I had to choose I would just file form 2555-EZ and just pay the extra tax on the interest. I also don’t want to do anything that would cause me to revoke my right to use the foreign earned income exclusion in the future.

But it would be nice to be able to use both forms so I can use form 1116 to deduct that extra little bit of tax.

I have a feeling that you cannot do both, but I will be interested to hear what others say, as I have no idea how to file my (albeit very small amount of) UK-based interest.

If not on 1116, do you just declare it on Schedule B?

Yes you can use both.

It might be general limitation - not passive - if subject to UK tax at 40% under what is known a the "high-tax kickout" rule.

Did anyone say tax was complicated!

It's just a small amount of interest from savings and current accounts which is taxed (I believe) at 20%.