Filing US taxes abroad

25 posts in this topic

Posted

Hello,

I've been browsing for about an hour and am having trouble finding my exact issue in this forum.

I'm a student at TUD. I came here after graduating from a University in Boston in May. I have my w2 for my job in Boston. I am also a Resident assistant for the Americans at TUD. I get free room/board and under 800 euros and month. My employer does not have a W2 for me, since I'm getting paid by the German university.

Does anyone know how to claim this in my US Taxes? I have not lived here for 330 days, so I think a 2555 is out....

Any help is appreciated!

Thanks

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Posted

Hi jvonboston,

I work as a tax preparer at H&R Block so I might be able to help you. The 330 days is not within the calendar year. Because you are out of the country, the date that you would have to file without extension is June 15, 2012. At that time, will you have lived in Germany greater than 330 days? You can also file an extension to October 15th. If you would like more information, please don't hesitate to send me a PM.

Kris

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Posted

Hello Jvonboston-

In order to claim foreign earned income exclusion in your case, you have to meet a physical presence test. You should use an automatic extension until June 15, 2012. If you need an additional extension until Oct 15, 2012, you should file a form 4868. However, please keep in mind if you owe taxes, you should pay the full amount by April 17, 2012 to avoid any interest.

If you need any help with filing your US tax return, please let us know. We specialize in US tax preparation for Americans living abroad.

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Posted

Hello Jvonboston-

In order to claim foreign earned income exclusion in your case, you have to meet a physical presence test. You should use an automatic extension until June 15, 2012. If you need an additional extension until Oct 15, 2012, you should file a form 4868. However, please keep in mind if you owe taxes, you should pay the full amount by April 17, 2012 to avoid any interest.

If you need any help with filing your US tax return, please let us know. We specialize in US tax preparation for Americans living abroad. www.ArtioPartners.com

This is incorrect...if you are living abroad during the deadline, you have until June 15th to both file AND pay any tax.

As per the IRS:

When to File

If you are a U.S. citizen or resident alien residing overseas, or are in the military on duty outside the U.S., on the regular due date of your return, you are allowed an automatic 2-month extension to file your return and pay any amount due without requesting an extension. For a calendar year return, the automatic 2-month extension is to June 15.

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Posted

Hello Kris-

We understand that the IRS rules can be very confusing. We have to mention that your statement is not correct.

The IRS website (publication 54) states the following “If you use a calendar year, the regular due date of your return is April 15. Even if you are allowed an extension, you will have to pay interest on any tax not paid by the regular due date of your return.” Please read under Extensions.

http://www.irs.gov/publications/p54/ch01.html#en_US_2011_publink100047323

The IRS extends a filing deadline to June 15, 2012 for Americans living abroad since other countries have different tax return due dates. This extension allows Americans abroad get all required tax forms.

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Posted

And the information I put down was from the IRS. I KNOW that the due date is April 15th, but if you are an American living abroad, you are allowed until June 15th to BOTH PAY AND FILE YOUR TAXES WITHOUT FILING AN EXTENSION. So I am not incorrect, YOU ARE!!!

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Posted

Hello Kris-

You are incorrect. This is the reason that we provided a link to the IRS website (publication 54) with the clarification.

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Posted

If I understand it correctly, you still have to file for the extension for the June 15th filing date if you haven't fulfilled the 330 day physical presence requirement by April 15th - i.e. if you don't reach your 330 days until between April 15th and June 15th.

Anyone able to confirm this (I'm no accountant!)

p.s. And I believe that interest starts accruing on your tax liability starting April 15th regardless, although no penalties are due. Unless of course you have made quarterly payments or had enough money withheld from U.S. payments to cover that tax liability.

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Posted

No that is incorrect. If you re an American living outside of the US, you don't have to file an extension by April 15th, you have until June 15th to do that. If you haven't reached the 330 day physical presence, you won't be able to do the FEIE (Form 2555), but you still can have the 1116 which is the foreign tax credit which considering that German taxes are much higher, isn't bad.

I've been studying for the Enrolled Agent tests and foreign earned income is a large component. I'm on the IRS website more than this one...and that is alot! Any information I am giving is directly from that website.

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Posted

And the information I put down was from the IRS. I KNOW that the due date is April 15th, but if you are an American living abroad, you are allowed until June 15th to BOTH PAY AND FILE YOUR TAXES WITHOUT FILING AN EXTENSION. So I am not incorrect, YOU ARE!!!

No that is incorrect. If you re an American living outside of the US, you don't have to file an extension by April 15th, you have until June 15th to do that. If you haven't reached the 330 day physical presence, you won't be able to do the FEIE (Form 2555), but you still can have the 1116 which is the foreign tax credit which considering that German taxes are much higher, isn't bad.

I've been studying for the Enrolled Agent tests and foreign earned income is a large component. I'm on the IRS website more than this one...and that is alot! Any information I am giving is directly from that website.

So, you are saying that just because you read the IRS website, that you Know more than specialists that do ex-pat taxes? Are you also saying that if we use such a service, or the services of a Big-6 accounting firm, ignore their advice to pay by 15 April (17 April 2012), that you WILL pay our interest for us? Wow, that is an awesome deal from someone reading from a website.

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Posted

Okay, I give up. There's got to be a separate thread for this, but I'm lazy and at work.

Where can I find someone living in Munich who will do my American taxes? I graduated in December 2010 and moved to Germany that month; I've been working (first one job from Mar - Aug, then another from Aug - present). I think I've got to pay taxes this year, since I've earned a sizable, adult amount of money, but the multiple jobs and the multiple countries thing is freaking me out, and at this point I'd rather just pay someone else to do it.

Help!

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Posted

The due date this year is Apr 17th.

And just for Kris17 (is that your age also Kris??) From the IRS website.---

" You can be granted an extension of time to file your return. In some circumstances, you can also be granted an extension of time to file and pay any tax due. However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid. "

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Posted

The due date TO PAY is APRIL 17th. For Americans living abroad, the due date TO FILE is June 15. If YOU HAVE A TAX LIABILITY AND DO NOT PAY BY APRIL 17th, YOU WILL ACCRUE INTEREST AT THE IRS PUBLISHED RATES UNTIL THE DAY YOU ACTUALLY PAY. However, it is not clear from Publication 57 whether there is a FAILURE TO PAY PENALTY. You all mention INTEREST but no one mentions PENALTIES which are separate.

If anyone is in Berlin and would like local service for filing taxes, please see my contact info at http://www.zandicpa.com

Otherwise, if you have a scanner, I also do service by e-mail/Skype and telephone. I'm licensed as a Certified Public Accountant in the States can can help you out. I have already done this for some clients. I am an ERO and can file for you electronically (if you qualify for it).

Circular 230 Notice: In accordance with Circular 230, please note that any tax advice given herein (and in any

attachments) is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of (i)

avoiding tax penalties or (ii) promoting, marketing or recommending to another party any transaction or matter

addressed herein.

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Posted

Will confirm also that Kris is incorrect, and I can speak from experience as I filed after April 17th last year but before June 30th. I owed a little bit of money, paid it, and in November the IRS came looking for 5 dollars or so in interest and a late fee because I paid after April 17th.

Also for anyone who is interested, I'm using this guy and have done for the last few years:

INTAXACT

He keeps the process pretty quick and pain free.

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Posted

I'm a Canadian who worked part of the year in the USA and part in Germany. I know for progressive taxation I must report my US income in my German return, but not being a US citizen, do I need to report my German income in my US return? I lived in the USA long enough to pass the SPT and file the resident return, and will be filing it again this year, and I expect to get quite a bit back from the USA, but I'm hoping this is not affected by my German income for which I am not beholden to a country whose citizen I am actually not.

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Posted

Also any tax preparers who will do Canadian, German, AND US returns, and are somehow reachable from Saarbrücken? It's probably too much to ask...

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Posted

So, you are saying that just because you read the IRS website, that you Know more than specialists that do ex-pat taxes? Are you also saying that if we use such a service, or the services of a Big-6 accounting firm, ignore their advice to pay by 15 April (17 April 2012), that you WILL pay our interest for us? Wow, that is an awesome deal from someone reading from a website.

I don't get your hostility...I am studying to be a specialist as well, and yes, I do use the IRS website because it has the information that the IRS provides for taxpayers. Even with the link that was provided by the other poster, it states that if you are living abroad you can have an automatic extension to both file and pay your taxes if you have taxes due. Now if you have not established a tax home in a foreign country and then that is a different matter.

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Posted

Not that I should have to explain my hostility, but there are a number of posts on this thread from a number of currently certified tax experts that are not aligned with your posts. And without the proper credentials, there is actually no recourse someone can take against you if they follow your bad information.

Direct quote from the IRS website:

Extensions

You can get an extension of time to file your return. In some circumstances, you also can get an extension of time to file and pay any tax due.

However, if you pay the tax due after the regular due date, interest will be charged from the regular due date until the date the tax is paid (emphasis added).

Source (http://www.irs.gov/publications/p54/ch01.html#en_US_2011_publink100047323)

So, in short, I'm just trying to stop the dissemination of bad information.

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Posted

Thank you for your source and my apologies all around. That will be quite helpful to me and it is appreciated.

Kris

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Posted

Will confirm also that Kris is incorrect, and I can speak from experience as I filed after April 17th last year but before June 30th. I owed a little bit of money, paid it, and in November the IRS came looking for 5 dollars or so in interest and a late fee because I paid after April 17th.

Also for anyone who is interested, I'm using this guy and have done for the last few years:

INTAXACT

He keeps the process pretty quick and pain free.

Just curious..Should a pain free process mean that you shouldn't owe any interest to start with? I assume that a good accountant should tell you about all tax dates so you don't pay any interest...especially since you are using him for several years..just saying.

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Posted

Just curious..Should a pain free process mean that you shouldn't owe any interest to start with? I assume that a good accountant should tell you about all tax dates so you don't pay any interest...especially since you are using him for several years..just saying.

A good accountant should tell you that if you file after the deadline AND you owe taxes as an American living abroad, you will be subject to interest. If you file after the extended deadline, you will be subject to interest on top of a failure-to-file and failure-to-pay PENALTY. If you DO NOT OWE MONEY (you are owed a refund), then you may not be charged any penalties NOR interest.

That is what a good accountant should be, EXACT and detail orientated.

And again...in accordance with Circular 230, please note that any tax advice given herein is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties promoting, marketing or recommending to another party any transaction or matter addressed herein

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Posted

In Kris's defense, the IRS does say 2 clearly conflicting things on 2 different pages. Navigating from the IRS home page, a lay person is most likely to first encounter the page U.S. Citizens and Resident Aliens Abroad, which states:

"If you are a U.S. citizen or resident alien residing overseas, or are in the military on duty outside the U.S., on the regular due date of your return, you are allowed an automatic 2-month extension to file your return and pay any amount due without requesting an extension. For a calendar year return, the automatic 2-month extension is to June 15.

If you are unable to file your return by the automatic 2-month extension date, you can request an additional extension to October 15 by filing Form 4868 before the automatic 2-month extension date. However, any tax due payments made after June 15 will be subject to both interest charges and failure to pay penalties."

Funny that they would mention interest charges after June 15, but not after April 15(17). At the bottom of this page, you find the link to Publication 54 (Tax Guide for U.S. Citizens and Residents Abroad), which offers the conflicting info.

I am no expert, but I would be inclined to err on the side of the earlier date to avoid trouble. (Counter-intuitive much? Pay before you file?) That said, I can read, and it seems to me if the G-men did come after you for $5 in interest for paying after April, you would have valid grounds to contest it. After all, the IRS screwed up here. ...Now off to troll the TT archives on this issue. I'm also a first-time filer and will probably need help.

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Posted

Hello,

I have a different situation. I am working (freelance) for an US company in Germany getting paid in $ in the US(just started Oct 1). I will not stay more than 90 days at a time and I don't have a visa or work permit. I plan to work until June 30th, which would be a total of 9 months.

I have been told different stories about the German taxes.

1. I have been told as long as I don't work more than 6 months in calendar year, I will not be responsible for German taxes. This is my companies take on it. Remember I am a contractor, so there is less motivation from the company to check these things out thoroughly.

2. My US accountant told me it is 6 months total in a 2 year period. But this is unclear since he is unaware of my total situation. I presume this is if you get a work permit and being paid from a German company.

Does anyone have experience with this topic? I would appreciate some guidance.

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Posted

I have a different situation. I am working (freelance) for an US company in Germany getting paid in $ in the US(just started Oct 1). I will not stay more than 90 days at a time and I don't have a visa or work permit. I plan to work until June 30th, which would be a total of 9 months.

Just to check, you do know that that after 90 days spent in the Schengen area, you have to leave it and only come back after another 90 days have passed, see here?

1. I have been told as long as I don't work more than 6 months in calendar year, I will not be responsible for German taxes. This is my companies take on it. Remember I am a contractor, so there is less motivation from the company to check these things out thoroughly.

That would only be true if you were an employee, see article 15 "Dependent Personal Services" of the double tax agreement between Germany and the US.

Since you are self-employed, there is no such clear cut rule.

You would fall under article 14 "Independent Personal Services":


ARTICLE 14


Independent Personal Services


  1. Income derived by an individual who is a resident of a Contracting State from the performance of personal services in an independent capacity shall be taxable only in that State, unless such services are performed in the other Contracting State and the income is attributable to a fixed base regularly available to the individual in that other State for the purpose of performing his activities.

  2. The term "personal services in an independent capacity" includes but is not limited to independent scientific, literary, artistic, educational, or teaching, activities as well as the independent activities of physicians, lawyers, engineers, economists, architects, dentists, and accountants.

This means that the only case when you will have to tax that German income only in the US is if both the following conditions are fulfilled:

  1. you are not a resident of Germany.
    • This is normally a grey area, but if you comply with visa law and never stay more than 3 months and then stay outside the Schengen area for at least another 3 months, you are in the clear and will remain a resident of the US and will only be taxed by the US.
      This also means that you do not register your residence here at a Bürgerbüro.

[*]you do not have access to a permanent office (= "fixed base") here in Germany.

  • So if you rent an office here and set up shop, Germany will tax you.

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Posted

Does anyone have advice on whether being a freelancer is the same as "self-employment" for the terminology of who must file a federal tax return?

Normally you must make over $9,500 in a tax year to have to file a 1040,

however self employed must file if they make just over $400.

I am a freelance artist, with a special visa, here in Germany.

Which bracket applies to me, since I do not own a company, but work for other employers on various projects?

Please advise.

Thank you!

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