tone

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About tone

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  • Nationality American
  • Gender Male
  • Year of birth 1969
  1.   It is unclear to me why you linked what you did in terms of misrepresenting things. Here's my situation: I am not earning well at the moment, but I have time on my hands (thanks, Covid!) and thought I could handle this if I simply dug in enough. The main stumbling block for me has been figuring out how the IRS will see those two accounts (OK, initially, I thought there might be an advantage to including my German spouse and their income, but have reconsidered that position...). Note, for example, the original title here -- I just couldn't believe that in order to figure out that I owed no taxes (because I had already paid so much in Germany) I would need to expend a great deal of money -- when I have the time to read a great deal -- to assess whether or not I owed anything to the U.S. and file accordingly. As our back-and-forth shows, I was perhaps naive as to what a novitiate could accomplish by simply spending the time. It would appear that I cannot safely answer my original question (how the IRS will assess these two accounts) and need to pay someone to assess it for me and render some judgement. I'm close to accepting that, but really don't know where to turn.    I hope I do not sound ungrateful for the responses you have so generously given here. I do realize that most people in the income bracket I have occasionally found myself in, would have found the resources I am now in need of. I suppose everyone has to start somewhere and the expat aspect of all of this just adds a layer I have found it difficult to negotiate, thus far.
  2. OK -- I understand that this probably makes sense, but I do not know where to find the requisite professional - and despite having earned well for part of the last 6 years, I am by no means rolling in excess capital, currently. However, I am very open if anyone has good experience with a professional tax advisor who can manage my situation.
  3.   OMG. I am blown away that I could still be so far off on some of this as to have typed "FACTA" repeatedly... ("FATCA(T)" has permanently fixed *that* problem, at least, thanks! ;)).   So, in the end, I hope my confusion and your clarifications will help others in my position.   I) FBAR / FATCA / Form 8938 / the Treasury Department / the IRS I think I have the basic breakdown, now:   FBAR (FinCEN Report 114) is for the Treasury department, but not related to ones tax-related reporting requirements to the IRS. The form is submittable online here: https://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html . The minimum threshold  for needing to file is a value of combined bank and other financial accounts of greater than $10,000, at any point, in a given tax year. As my total in the bank in Germany plus the value of the two life insurance/retirement policies exceeded $10,000 at various points in the last 6 years, I DO need to file FinCEN Report 114 online for those years as part of the Streamlined Offshore Procedure.   Form 8938, "Statement of Specified Foreign Financial Assets", is a form to be filed with ones taxes to the IRS if one meets certain criteria (https://www.irs.gov/businesses/corporations/do-i-need-to-file-form-8938-statement-of-specified-foreign-financial-assets). As it turns out for me, a U.S. citizen living abroad, my total financial assets do not exceed these limits and I do not need to file this form.   II) Open questions re: my accounts and Forms 2555 plus 1116 vs 1116 alone If I have managed to say all of the above correctly, and, given that I am taking the path that was strongly described as the better one and only filing married filing separately (leaving my German partner out of it, in other words) based on my, as a U.S. citizen , requirement to do so with the IRS, then I have two outstanding matters to where I still have questions:   Q1) the need to report as part of my TAX FORMS to the IRS (i.e., 1040) anything regarding the two life insurance/retirement accounts I hold: Gothaer VarioRent plus Allianz RiesterRente KomfortDynamik - Fonds I don't have any other accounts (in the U.S., for example - it was an expensive transatlantic move) and I was treating these as tax-deferred retirement accounts that I have not withdrawn any money from and simply not including anything about them in my 1040 return (they ARE reported in my FBAR filing on years where my total assets exceeded $10,000).    Q2) whether, given that I have no other reportable income outside work and these two financial accounts in Germany, or elsewhere, form 1116 isn't just as good as form 2555 plus form 1116, in my case, for those years where my earnings exceeded the 2555 exclusion limit. I have to confess I have already filled out form 1116 and am all ready to mail the forms, but I am hesitating in case I am misunderstanding the matter covered in i) or am making some mistake to consider form 1116 fairly straight-forward given my somewhat simple investment profile...   Thanks, again, in advance, for any light you may be able to shed on these matters.   
  4.   - For my own peace of mind, one last question: it looks easier to me to "simply" file form 1116 (Foreign Tax Credit) rather than form 2555 (to claim the Foreign Earned Income Exclusion) given that I always pay way more in tax in Germany than I would be required to do in the U.S.  Am I making a mistake not to start with form 2555 and deal with any amount over the exclusion with form 1116?    Again, many, many thanks for your response. These can be quite confusing processes for a first-timer ;). 
  5. I finally have the time, thanks to the current crisis, to investigate and get my own (U.S. citizen in Germany for over 10 years) and *maybe* my German spouse’s (I believe I understand the option to treat my spouse as a resident alien for tax purposes, but have not decided, yet) tax reporting current with the IRS via the „Streamlined Foreign Offshore“ filing procedure. Our income in the last six years is modest (no FACTA concerns) but occasionally triggers an FBAR filing requirement. The taxes we have paid on income in Germany exceed what we might owe in the U.S. such that it seems pretty straight-forward to use form 2555 (Foreign Earned Income) and/or form 1116 (Foreign Tax Credit) to eliminate any tax liability in the U.S.  So far, no problem. Where I get badly stuck is trying to figure out how the IRS will interpret the small private investment accounts we have accumulated, over the years, in hoping to look out for each other in case of death and build for retirement.    Here, are some of the details on those investments:  1) Me (U.S. citizen): Gothaer VarioRent plus 2) Me  (U.S. citizen): Allianz RiesterRente KomfortDynamik - Fonds 3) German spouse: Gothaer VarioRent - Garant 4) German spouse: Allianz BasisRente KomfortDynamik 5) German spouse: FFB (FIL Fondsbank GmbH) Fondsdepot with these details:  Fund name: Swiss Rock (Lux) Dachfonds - Ausg... WKN / ISIN: A0NEGQ / LU0349309376 Investment company: Swiss Rock Asset Management AG and here are my questions:    *I believe that the Gothaer and Allianz accounts are all tax-deferred and I can therefore comfortably not report any undistributed income associated with them in my yearly U.S. tax filings (but I am not positive because I know the regulation regimes are different in Germany and the U.S. — is what is tax-deferred here necessarily also considered so by the IRS?).   *The FFB account confuses me the most. What would the IRS call this and what would they expect from me? Is this a special category of income when the fund makes money over the value of my deposits? What happens when it loses money relative to my deposits?    *Does a form 8833 and "taking a position based on a tax treaty" come into play in any of these cases? Do I need to explain why I don’t report a tax-deferred account?      It’s been a long journey to build my current understanding of these matters. Please help me figure out how to make the next steps - and „Vielen Dank im Voraus“, as the Germans so politely put it ;).    (P.S. I thought long and hard about sharing all those details of the funds we hold, but I don’t believe there is enough information here to put us at any risk and I need to understand precisely how to represent *these* accounts to the IRS. If anyone with more experience in these matters disagrees with my assessment on the wisdom of sharing this info, please don’t hesitate to give voice to your concern ;).)