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I spent a few years living and working in Europe with EU companies or US subsidies there. The one main gotcha that no one thinks about is the tax and retirement
by orbz 10y ago
I spent a few years living and working in Europe with EU companies or US subsidies there. The one main gotcha that no one thinks about is the tax and retirement savings side of things, both of which you should probably do.
As a US citizen you're obligated to file (and possibly pay) taxes no matter where in the world you work and reside, no exceptions. It's the price of having US citizenship and access to the US embassy. In most cases you probably won't end up paying anything when you declare the tax you paid in your resident country, but that gets complicated with that country having a different tax year than the US (April to April vs calendar year). Get a competent expat attorney and pay for it to be done for you. There's also the FBAR which you might need to become acquainted with.
As for the retirement savings, lots of countries have their own types of retirement accounts that can be invested in as part of your paycheck. The caveat here is how to repatriate the funds when you leave before hitting your 60's. I haven't found a great way to roll those over to an IRA back in the states yet.
- deleted 10y ago[deleted]
- Bombthecat 10y agoDo you really need to declare that you paid taxes in Germany? Isn't there some sort of agreement?
- vinay427 10y agoAs the parent said, you unfortunately need to declare the income as a US citizen but may or may not need to pay taxes on it.
- mlent 10y agoThere's ~90k cap. If your foreign-earned income is less than that, you state the tax paid in Germany and don't need to pay for US taxes. If you make more than ~90k, you have to pay taxes for the amount over ~90k.
- Bombthecat 10y agoThanks, yeah, I´m trying to understand that.. Since I need to do it for my wife... It looks super complex :(
- mlent 10y agoI use TurboTax and it's built into the software finally, and makes this quite simple. Originally they just made you look at the tax form and fill it out yourself, but they've really improved the "foreign american" parts of the tax software in the past two years.
- Bombthecat 10y agoNice! Which version should I use? Oh boy,just realised that we need to report the last three years too. Called streamlined process... Can they do that?
- mlent 10y agoYou would need to buy past versions of the software I think. I don't know how that works -- I just use my parent's copy every year. You get like 3 licenses whenever you buy the software, so if you know someone else who needs to file maybe you can share ;) But I think you'll have to print them out and mail them in manually, rather than electronic filing. But I haven't tried myself so I'm not sure. (Edit: To be clear, the tax software is versioned by tax year. So, "Turbotax 2016" is what I will use this year. So you'd have to buy Turbotax 2015, 2014, and 2013 presumably.)