Taxes: guide to filling out Anlage AUS?

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Hi everyone! I really appreciate any help, as I feel like I have exhausted a lot of my options at this point.

 

From what I have read on here (the Elster Wiki) and elsewhere, I believe I need to file Anlage AUS. However, I have not found an English-language guide for the current version of this form. Can someone point me to that if it exists here? If not, I could use suggestions on how to find guidance for this form. Our Finanzamt is not inclined to answering questions in English (understandably so), and it seems like the Lohnsteuerhilfevereine (that I would happily pay to assist me with this) only work with standard domestic income. I cannot afford a private Steuererberater. I did find the German instructions for the form, but between poor translation and all the references to tax code, I am pretty lost looking at it.

 

Moreover, I would love some confirmation or correction on whether Anlage AUS is the correct form for my situation. My husband and I are Americans living in Germany. We have been here since June 2013, and we were married in June 2014. He has been employed as a researcher at a university this entire time. I have not been employed in Germany at all, but I have continued to sporadically complete freelance editing projects for a company back in the US. So, I am struggling with how/where to report my US income. I do not believe it goes on the N-AUS, as it is not regular wages / employment but essentially self-employment. I am hoping that, because I am paying US tax on that income (I have not submitted my US taxes yet but have completed a draft of them), it would be covered by the double taxation agreement and would only affect the tax rate on our German income here. But, I suppose it is possible that because that money was earned while I was residing here, the origin (US) would not matter and it would be considered subject to German tax. Can anyone clarify if (1) I should expect to only be taxed on it once, in the US, and (2) if the AUS form is the correct reporting method for this money?

 

Thanks so much in advance!

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You are resident in Germany and therefore should be taxing your worldwide income in Germany.

 

If you had already paid US tax on that income then you could've have used Anlage AUS, but in your case simply declare it in Anlage S.

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Thanks for the response. Because it was freelance earnings from an American company, I assumed I would be reporting it as income from the US. So, I have not taken any of the necessary legal/bureaucratic steps to practice freelance work here in Germany. Wouldnt it be problematic then to report it as regular German freelance earnings?

 

If I would rather submit my American taxes now as they are (where I pay tax on those earnings) and report this on Anlage AUS (as you imply is possible), do you know of line-by-line English resources for the AUS?

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You are resident in Germany and therefore should be taxing your worldwide income in Germany.

 

If you had already paid US tax on that income then you could've have used Anlage AUS, but in your case simply declare it in Anlage S.

 

Sorry, your last sentence here made it seem like Anlage AUS was an acceptable option if my US taxes had already been submitted. I am not trying to avoid paying anything, just trying to figure out how to do this correctly given the current circumstances.

 

I can see you are a go-to person here for tax advice. If this is within your sphere of knowledge, can you advise me on best next steps for cleaning up my work/income situation? I believe I am legal to work here because my husband is employed, but again, did not register any employment with any offices here because I thought the source of the freelance work (American) was the determining factor. I assume this means I will be paying VAT out of pocket; are there any other unpleasant ramifications I should expect, and do you know what steps I need to take to make these earnings legal?

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How high was your turnover in 2013 and 2014?

As long as you were under the Kleinunternehmer limits, you won't owe any VAT.

 

Simply fill your profit into Anlage S, hand in a simple profit/loss calculation, fill in the other tax forms for your joint tax return (probably just the Mantelbogen ESt 1A, Anlage Vorsorgeaufwand and Anlage N) and submit everything to the Finanzamt.

That's it from the tax point of view.

 

Whether your visa permits you to freelance is another question. As long as your husband isn't a EU citizen or a blue card holder, probably not.

However, there is no connection between the Finanzamt and the Ausländerbehörde, so you can stop worrying.

 

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Thanks so much for all of your help. I have some follow-up questions that I hope you can clarify for me.

 

I earned 15k USD in 2014, so I see that does put me at kleinunternehmer status. On the ELSTER wiki, I see the distinction between Anlage S and G is whether or not it is a privileged freelance trade. Just double-checking: editing work falls into this category?

 

If my tax home and the DBA mean that these earnings get taxed by Germany, do you know how that affects my American tax return? I would guess that I now add this amount in with my husband's salary as foreign earned income rather than reporting it as a standard 1099-MISC. Is that correct, or would I be misleading American tax authorities by not showing somehow that these earnings were from a US company?

 

Lastly, a few things regarding visas/auslanderbehoerde/etc. We were told by my husband's case worker at the auslanderbehoerde that I would be legal to work once we were married-- perhaps this is because he is a scientist (/maybe blue card status). Perhaps also it is not a problem because I was never hired by a German entity? I did some searching on here in a panic after realizing we may have screwed this all up, and I found a discussion where someone was advised that after making roughly 400 euro average per month, they are responsible for their own health insurance and would not be covered on their spouses. Do you know if this now applies to me and means that I will have to pay 6 months backcharges for my own healthcare? And, if so, is this something that I can directly address/resolve or do I simply file the taxes as you have specified and wait for the penalization/follow-up to come?

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It's not one of the catalogue professions, but you should put it into Anlage S, since it's "brain" work.

 

Sorry, but I don't know anything about US tax returns.

 

If you are not allowed to freelance in your visa then you're not allowed to freelance, full stop, no matter from what country your clients are.

But as I said before, the Ausländerbehörde won't get to know about this from the Finanzamt.

 

You can contact his Krankenkasse and pay for those months.

There is also no relationship between the Finanzamt and the Krankenkasse. Usually, the Krankenkassen send you a questionnaire once a year in which they ask whether the spouse, i.e. you, had a monthly profit of more than 405€, and you are supposed to be honest when replying.

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@zeekatze

 

Your freelance editing services is categorized as self-employment income or income as a sole proprietor.

 

Your receipts and allowable business deductions will go on Schedule C (or Schedule C-EZ) of your US Form 1040.

 

Since you performed your services while physically present in Germany, this income is regarded (by the US and Germany) as German-sourced. (That is why Anlage AUS has no application to this particular item of your income.)

 

Consequently, Germany has the primary right to tax it and, if you follow PandaMunich's instructions that is what will happen.

 

US domestic tax law offers you two methods to avoid being taxed twice on this income:

 

Since your tax home appears to have been Germany, your self-employment/sole proprietorship work is from personal services and you likely will meet either the "physical presence test" or the "bona fide residence test", you will be able to EXCLUDE your gross (not net) foreign earned income (not investment income) from your US taxable income under IRC § 911 (foreign earned income exclusion). Eligibility for the exclusion and the claim for the exclusion itself is in Form 2555 and the instructions thereto.

 

Alternatively, you can claim a credit for German taxes paid on your German-source earnings using Form 1116 - foreign tax credit for individuals.

 

Although this probably does not (yet) apply to you, if your gross earnings exceed the annual FEI exclusion amount (currently about $100,000), then you can claim both the exclusion and a pro-rata portion of German taxes paid on that portion of your income that the FEI did not cover.

 

Your obligation to pay US social security taxes on your self-employment income is a completely separate issue and is governed by IRC § 1401( c). By applying for a "certificate of coverage" from the Deutsche Rentenversicherung (Form D/USA 101a) and filing Schedule SE showing $0.00 SE tax owed (you may have to override your tax prep software to accomplish that) with the words (in big block letters - crayon is acceptable): "TREATY EXEMPT" you can avoid having to pay contributions to the US social security system on your German-sourced self-employment income. Whether you have any actual obligation to pay into the German social security system or Kunstlersozialkasse is something I am not qualified to answer but my educated guess is that as a freelance "editor" you would not.

 

Go to www.irs.gov (an excellent website by the way) and download Publication 54 and all the related forms and instructions for a general introduction to the US tax and reporting compliance horrors that await you as a result of your decision to live off the reservation.

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Hi PandaMunich,

 

I’m trying to figure out if I need to complete an Anlage AUS. I have three forms of US income that I’m reporting on my Anlage KAP: (i) interest from bank savings account, (ii) gains from sales of mutual funds, and (iii) dividends from mutual funds. I did not fill in lines 27 or 28 on my Anlage KAP.

 

In another thread, you wrote that “Officially, [the Anlage AUS] is no longer needed for foreign capital income (except if you had to fill in lines 27 and 28 in Anlage KAP, then you do need it).”

 

I was happy about that conclusion (fewer forms = less work), but then I read your statement in this thread that “Anlage AUS is meant for income where the double taxation agreement between Germany and the US prescribes a source tax in the US, e.g. on dividends.”

 

1. Does this mean that I need to fill out the Anlage AUS for my US dividends?

 

2. [Assuming that completion of the Anlage AUS is optional for the dividends.] I have no idea what I will have to pay the US in tax for the dividends. I understand that the US tax is capped at 15% pursuant to the treaty, but I’m hoping my actual tax bill will be less or 0. If I don’t have the actual US tax amount for the dividends, is there any point in completing the Anlage AUS?

 

3. Based on my reading of Articles 11 and 13(5) of the US-Germany tax treaty, Germany has the sole (primary?) taxation right for interest and gains from the sale of mutual funds. So these items of income definitely do not need to be included in the Anlage AUS. Do you agree?

 

As always, thanks for your help.

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Rules change over time.

Now, the first (= newer) statement holds true.

 

 



  1. No.
  2. No, because you would claim for foreign tax directly in Anlage KAP.
  3. You seem to have misunderstood the function of Anlage AUS, it is used as a pointer to foreign income (in Anlage V, Anlage S, Anlage G and so on) on which Germany has the taxation rights, or which will raise the German tax rate. Otherwise you wouldn't report that income at all in a German tax return.
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Sorry in advance if this was already asked but I haven't found it before and someone put the bug in my hear...

 

Does a freelance need to file Anlage AUS if he had invoiced someone abroad?

 

Thanks

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Only if you paid foreign tax on that freelance income, and the double taxation agreement between Germany and that country has an Anrechnungsklausel (= that foreign tax reduces the German tax owed).

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Did you pay foreign tax on that foreign freelance income?

If yes, then telling me what country we're talking about would considerably advance things ;)

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No i didn't!

I just sent an invoice to Spain for a job and got payed exactly what owed. I hope that's fine.

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Hi Panda

I have started to get rental income from a property i own in Ireland.  So far after 2 years I have not declared it for Irish tax but can this be declared on an Anlage AUS form in my German tax declaration?   Do I have a choice as to whom I pay tax?

Thanks

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No, you have no choice, article 6 of the 2011 double taxation agreement (DTA) between Germany and Ireland assigns the taxation right to Ireland.

 

So, you will have to declare it in your Irish tax return and not at all in your German tax return (since that DTA has a progression clause in article 23 2. d) and because Germany chose not to apply progression to EU/EEA rental income).

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