This is a question about double taxation in the following situation.

I am a citizen of the US considering relocating to Switzerland. I am also a citizen of the EU. I mention that only because I think it means I will have no difficulty becoming a resident of Switzerland under the EU rules

If I move to Switzerland, I will be there for about 7 months a year and in the US for the remaining time. I will not work in Switzerland, but will live off of consulting work, savings and retirement income from the US.

I know that the US will tax all my world wide income.

But, what about Switzerland? Will they also tax my US derived income? If so, I am assuming I will get credit in the United States for those taxes when I file my IRS return?

Your comments will be most appreciated.

Residents in Switzerland are taxed on their entire global income. Also entire global assets are wealth taxed here.

Do you have any idea of what the wealth tax would be if you reside in Geneva?

I assume it varies by the total amount of wealth. Does it only kick in after a certain amount?

Unaware of Geneva rates. The usual pattern is no tax on the first 50 to 100k (higher allowances for married). Then 1 to 2% rising progressively. Google the Web for an online calculator.

Here is a comment from another post I made:

As an expat, you can file an extension for up 6 months( i.e. your
return would be due October 15)

You have to file a return if you are a US citizen.

As a person living outside the US, you can either take

1. Foreign tax credit for taxes paid in Switzerland.
2. Exclude 87000 of foreign income from your US return.

I did option 2 because I live in Canton Zug, and taxes are lower there.
The option to pick depends on your tax situation.

Hi,

I'm an American living in Geneva and I work freelance so I'm in a similar situation. I spoke to the IRS when I first moved here because although I work from Geneva, some of the income is paid directly into my US account. As long as the work is done outside the US you are exempted up to 200K. However, if you do not keep residency in your "new tax country" for a full year that amount is taxed differently.

My advice is to call the IRS free toll line 800-829-1040 and they will do a better job at explaining your particular situation.

As far as Switzerland goes, you'll pay taxes depending on the permit you get once you get here. Check the info in the Swiss info portal.

Good luck,

Sorry, but you must have misunderstood. It is as follows:

For 2008, the maximum exclusion is up to $87,600 per qualifying person.
So, if you were married, you can multiply that times two for a total of
$175,200.

Thanks HollidayG.

Thanks, that is correct, 175K is a more precise figure than almost 200K!

However, in addition to the amount you mentioned, you may also deduct housing, some health and education expenses. Housing is usually 13K but it was considerably more for Geneva, when you put it all together it adds up. I do think the IRS helpline is a good resource for those questions!

Cheers,

B