Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #21  
Old 20.01.2012, 07:52
kiwiguy08's Avatar
Forum Veteran
 
Join Date: Apr 2008
Location: Horgen
Posts: 1,257
Groaned at 26 Times in 19 Posts
Thanked 865 Times in 428 Posts
kiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputation
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post

  • Your tax shelters are limited -- if you use the Swiss pension scheme ("pillars 2 and 3") to reduce your CH taxes, as the Swiss do, the US will tax the money you put in -- and then the Swiss will tax it when you take it out, resulting in double taxation of those CHF's. People in the financial world may have finagled some other way to shelter money (non-qualified deferred compensation plan in the States? I think there are some fancy and advantageous expat contracts out there, but we are local).
Can you please explain how this works. My gross Swiss income is slightly under the FEIE limit. (not taking into account taxes, housing exemptions)

Say for example i earn 50,000 gross, I pay my contributions to AHV, PK, and the employer gives a matching portion of that as well into the system. Does that mean that my actual income in the eyes of the US is 50K+ whatever my employer contributions are?
Reply With Quote
  #22  
Old 20.01.2012, 09:59
Forum Veteran
 
Join Date: May 2009
Location: suburbs of LA, USA
Posts: 934
Groaned at 11 Times in 10 Posts
Thanked 873 Times in 439 Posts
BrianJW has a reputation beyond reputeBrianJW has a reputation beyond reputeBrianJW has a reputation beyond reputeBrianJW has a reputation beyond repute
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post
Can you please explain how this works. My gross Swiss income is slightly under the FEIE limit. (not taking into account taxes, housing exemptions)

Say for example i earn 50,000 gross, I pay my contributions to AHV, PK, and the employer gives a matching portion of that as well into the system. Does that mean that my actual income in the eyes of the US is 50K+ whatever my employer contributions are?
If you earn chf 50k gross or even up to whatever 90k usd is in chf (depending on exchange rates) and you don't have major income from investments you will not owe the US govt anything. You still need to file a return but can download turbotax and it's easy step by step.
Reply With Quote
  #23  
Old 20.01.2012, 10:14
Forum Veteran
 
Join Date: May 2009
Location: suburbs of LA, USA
Posts: 934
Groaned at 11 Times in 10 Posts
Thanked 873 Times in 439 Posts
BrianJW has a reputation beyond reputeBrianJW has a reputation beyond reputeBrianJW has a reputation beyond reputeBrianJW has a reputation beyond repute
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post
Well in my case I have no 'extra' deductions and I've never been subject to US tax. Keep in mind the US tax is only on the amount above the exemption, not your entire income. Also we are only talking about US federal since you don't have to pay state tax (maybe some expats might who are on a short term work assignment though).

I calculate my tax rate every year as a 'flat tax' and my overall rate is about 10% less than what it was in the US.

Regards,
Dan
The rules vary on this state by state. You need to break residency. It's worth reading the state rules.
Reply With Quote
This user would like to thank BrianJW for this useful post:
  #24  
Old 20.01.2012, 10:57
kiwiguy08's Avatar
Forum Veteran
 
Join Date: Apr 2008
Location: Horgen
Posts: 1,257
Groaned at 26 Times in 19 Posts
Thanked 865 Times in 428 Posts
kiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputation
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post
If you earn chf 50k gross or even up to whatever 90k usd is in chf (depending on exchange rates) and you don't have major income from investments you will not owe the US govt anything. You still need to file a return but can download turbotax and it's easy step by step.
So what happens if you are slightly under the tax threshold and your company's contribution to your AHV and Pensionskasse takes you over the threshold?
Reply With Quote
  #25  
Old 20.01.2012, 11:03
HollidayG's Avatar
Forum Legend
 
Join Date: Jan 2008
Location: Kanton Zürich
Posts: 3,034
Groaned at 50 Times in 35 Posts
Thanked 1,178 Times in 736 Posts
HollidayG has an excellent reputationHollidayG has an excellent reputationHollidayG has an excellent reputationHollidayG has an excellent reputation
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post
So what happens if you are slightly under the tax threshold and your company's contribution to your AHV and Pensionskasse takes you over the threshold?
Technically, Pensionskasse counts as income and you should include
it on your return.
Reply With Quote
This user would like to thank HollidayG for this useful post:
  #26  
Old 20.01.2012, 11:16
kiwiguy08's Avatar
Forum Veteran
 
Join Date: Apr 2008
Location: Horgen
Posts: 1,257
Groaned at 26 Times in 19 Posts
Thanked 865 Times in 428 Posts
kiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputation
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post
Technically, Pensionskasse counts as income and you should include
it on your return.
Thanks! The employers contribution to the AHV does not count as income then.
Reply With Quote
  #27  
Old 20.01.2012, 13:16
HollidayG's Avatar
Forum Legend
 
Join Date: Jan 2008
Location: Kanton Zürich
Posts: 3,034
Groaned at 50 Times in 35 Posts
Thanked 1,178 Times in 736 Posts
HollidayG has an excellent reputationHollidayG has an excellent reputationHollidayG has an excellent reputationHollidayG has an excellent reputation
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post
Thanks! The employers contribution to the AHV does not count as income then.
To be honest, I am not sure, but I do not declare it personally.

There is an American CPA here that specializes in taxes.

Do you want her contact?
Reply With Quote
This user would like to thank HollidayG for this useful post:
  #28  
Old 20.01.2012, 13:20
kiwiguy08's Avatar
Forum Veteran
 
Join Date: Apr 2008
Location: Horgen
Posts: 1,257
Groaned at 26 Times in 19 Posts
Thanked 865 Times in 428 Posts
kiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputationkiwiguy08 has an excellent reputation
Re: FAQ: Expat's Guide to US Tax

Sure, should be beneficial.
Reply With Quote
  #29  
Old 10.04.2012, 08:38
SwissMs2000's Avatar
Forum Veteran
 
Join Date: Jun 2007
Location: Cham, Zug
Posts: 626
Groaned at 4 Times in 2 Posts
Thanked 471 Times in 236 Posts
SwissMs2000 has earned the respect of manySwissMs2000 has earned the respect of manySwissMs2000 has earned the respect of many
Re: FAQ: Expat's Guide to US Tax

I have a question- as an American with 2 children (both are dual US/CH), can I claim the child credits for them or do we need to physically live stateside to claim it?
Reply With Quote
  #30  
Old 10.04.2012, 12:15
Junior Member
 
Join Date: Oct 2007
Location: Cham
Posts: 42
Groaned at 2 Times in 1 Post
Thanked 12 Times in 9 Posts
Kepete17 has no particular reputation at present
Re: FAQ: Expat's Guide to US Tax

yes you can claim it.
Reply With Quote
  #31  
Old 05.04.2013, 00:01
Newbie 1st class
 
Join Date: Dec 2012
Location: Basel
Posts: 12
Groaned at 0 Times in 0 Posts
Thanked 3 Times in 3 Posts
Laura358 has no particular reputation at present
Re: FAQ: Expat's Guide to US Tax

Thank you! The following link was really helpful!

Quote:
View Post
As US tax season is rapidly approaching, I thought I would take a few moments to share with others on EF the single-best resource on US taxes for expats that I've come across: The Expat's Guide to US Taxes
Reply With Quote
This user would like to thank Laura358 for this useful post:
  #32  
Old 05.04.2013, 10:00
Member
 
Join Date: May 2012
Location: Aargau
Posts: 111
Groaned at 0 Times in 0 Posts
Thanked 143 Times in 51 Posts
Dual US/Swiss Citizen has made some interesting contributions
Re: FAQ: Expat's Guide to US Tax

Are capital gains really 100% US tax liable?

I recently sold some stocks with a capital gain. My US tax preparer advised that I can't counter this with any Swiss tax credits since CH has no tax on capital gains. He says each category of income is separate. Could anyone confirm if this is correct?
This means that any gains in investment income would be 100% taxable in the US regardless whether one is below the FEIE.
Reply With Quote
  #33  
Old 05.04.2013, 16:04
Village Idiot's Avatar
Forum Legend
 
Join Date: Jul 2009
Location: Basel
Posts: 3,596
Groaned at 33 Times in 30 Posts
Thanked 6,757 Times in 2,174 Posts
Village Idiot has a reputation beyond reputeVillage Idiot has a reputation beyond reputeVillage Idiot has a reputation beyond reputeVillage Idiot has a reputation beyond reputeVillage Idiot has a reputation beyond reputeVillage Idiot has a reputation beyond repute
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post
I recently sold some stocks with a capital gain. My US tax preparer advised that I can't counter this with any Swiss tax credits since CH has no tax on capital gains. He says each category of income is separate. Could anyone confirm if this is correct?

This means that any gains in investment income would be 100% taxable in the US regardless whether one is below the FEIE.
He is correct. You cannot combine categories of income. I have this issue each year because I have foreign tax credits that I carry forward each year. I can use these credits against my earned income, but not any other categories.

Also, dividends don't fall under the FEIE. The clue is in the second 'E' (FEIE), which stands for Foreign Earned Income Exclusion. Dividends are unearned income, not earned income.
Reply With Quote
  #34  
Old 05.04.2013, 16:11
UncleTell's Avatar
Junior Member
 
Join Date: Aug 2012
Location: Deutschschweiz
Posts: 69
Groaned at 0 Times in 0 Posts
Thanked 63 Times in 24 Posts
UncleTell has no particular reputation at present
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post
.....The clue is in the second 'E' (FEIE), which stands for Foreign Earned Income Exclusion. Dividends are unearned income, not earned income.
But what about the 350.-- CHF interest that my savings accounst bequested me with last year! I didn't "Earn" them either!
Reply With Quote
  #35  
Old 07.04.2013, 21:59
Forum Legend
 
Join Date: Oct 2009
Location: la cote
Posts: 3,032
Groaned at 18 Times in 11 Posts
Thanked 2,477 Times in 1,360 Posts
runningdeer has a reputation beyond reputerunningdeer has a reputation beyond reputerunningdeer has a reputation beyond reputerunningdeer has a reputation beyond reputerunningdeer has a reputation beyond repute
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post
But what about the 350.-- CHF interest that my savings accounst bequested me with last year! I didn't "Earn" them either!
I am guessing it is not a serious question, clearly not earned.

That is why retiring abroad with a US tax obligation is near financial suicide, at least in a low income tax country like CH, no FEIE.
Reply With Quote
  #36  
Old 16.12.2013, 11:38
Member
 
Join Date: Nov 2012
Location: Geneva
Posts: 203
Groaned at 15 Times in 10 Posts
Thanked 68 Times in 41 Posts
TuxedoPants has earned some respectTuxedoPants has earned some respect
Re: FAQ: Expat's Guide to US Tax

Sorry to drag up an old thread, but I could not find anywhere in the guide where it says Your first $91K earned abroad will not be taxed. Can anyone confirm this is true? Does this mean that I do not need to fill out tax forms until after I have earned 91,000?

Quote:
View Post
Yes, worry. Whether the impact is material or not depends on how much money you will be earning. Read the guide mentioned above to get a general understanding. We haven't had to do a year of taxes yet, but this is what I've figured out by reading (lots of great info on this site if you dig around a little).

  • Your first $91K earned abroad will not be taxed and you can claim a credit for foreign taxes paid on the rest (i.e. you will not be taxed double).
  • Housing in Geneva is outrageously expensive, but you will get a housing deduction specific to Geneva that may or may not make it worth it.
  • If you end up owing the IRS, it tends to be the difference between what you paid the Swiss government and what you would have paid the US government if you had lived there (i.e. being in a "low tax" country doesn't help you).
  • Your tax shelters are limited -- if you use the Swiss pension scheme ("pillars 2 and 3") to reduce your CH taxes, as the Swiss do, the US will tax the money you put in -- and then the Swiss will tax it when you take it out, resulting in double taxation of those CHF's. People in the financial world may have finagled some other way to shelter money (non-qualified deferred compensation plan in the States? I think there are some fancy and advantageous expat contracts out there, but we are local).
  • You can still take the US deductions that you always have -- charity, mortgage, self-employment expenses, etc.
  • Our tax advisor thought that it would "come out in the wash" based on the information we gave him.
  • Your decision has to be based on a lot more than $$$ or you may be very unhappy.
  • Whatever you do, don't post on EF "Can I survive in Geneva on 120,000 CHF/year".
Reply With Quote
  #37  
Old 16.12.2013, 11:44
Village Idiot's Avatar
Forum Legend
 
Join Date: Jul 2009
Location: Basel
Posts: 3,596
Groaned at 33 Times in 30 Posts
Thanked 6,757 Times in 2,174 Posts
Village Idiot has a reputation beyond reputeVillage Idiot has a reputation beyond reputeVillage Idiot has a reputation beyond reputeVillage Idiot has a reputation beyond reputeVillage Idiot has a reputation beyond reputeVillage Idiot has a reputation beyond repute
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post
Sorry to drag up an old thread, but I could not find anywhere in the guide where it says Your first $91K earned abroad will not be taxed. Can anyone confirm this is true? Does this mean that I do not need to fill out tax forms until after I have earned 91,000?
You are referring to the Foreign Earned Income Exclusion, which is $97,600 for 2013. You can exclude this income, but you still need to file a tax return.

http://www.irs.gov/Individuals/Inter...come-Exclusion
Reply With Quote
The following 2 users would like to thank Village Idiot for this useful post:
  #38  
Old 16.12.2013, 12:08
Member
 
Join Date: Nov 2012
Location: Geneva
Posts: 203
Groaned at 15 Times in 10 Posts
Thanked 68 Times in 41 Posts
TuxedoPants has earned some respectTuxedoPants has earned some respect
Re: FAQ: Expat's Guide to US Tax

Thanks for the link!

So basically every year, I fill out a tax return but never owe US taxes because I earn under the FEIE?

Quote:
View Post
You are referring to the Foreign Earned Income Exclusion, which is $97,600 for 2013. You can exclude this income, but you still need to file a tax return.

http://www.irs.gov/Individuals/Inter...come-Exclusion
Reply With Quote
  #39  
Old 16.12.2013, 12:42
Forum Legend
 
Join Date: Sep 2006
Location: SZ
Posts: 9,615
Groaned at 23 Times in 22 Posts
Thanked 21,324 Times in 6,850 Posts
meloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond reputemeloncollie has a reputation beyond repute
Re: FAQ: Expat's Guide to US Tax

Quote:
View Post
Thanks for the link!

So basically every year, I fill out a tax return but never owe US taxes because I earn under the FEIE?
That's the gist, but be aware that there might be some complications. For instance, time spent working in the US, such as business trips while resident abroad, could reduce the FEIE. Also be aware that investment income might be treated differently in CH and in the US.

OH, and whatever you do - don't forget your FBAR!
Reply With Quote
  #40  
Old 16.12.2013, 12:46
Member
 
Join Date: Nov 2012
Location: Geneva
Posts: 203
Groaned at 15 Times in 10 Posts
Thanked 68 Times in 41 Posts
TuxedoPants has earned some respectTuxedoPants has earned some respect
Re: FAQ: Expat's Guide to US Tax

Thanks. Oh boy I don't even know what FBAR stands for. Commencing more google research.
Quote:
View Post
That's the gist, but be aware that there might be some complications. For instance, time spent working in the US, such as business trips while resident abroad, could reduce the FEIE. Also be aware that investment income might be treated differently in CH and in the US.

OH, and whatever you do - don't forget your FBAR!
Reply With Quote
Reply

Tags
1116, 2555, feie, irs, sticky thread, us tax




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Expat's in Neuchatel? catchmikey Daily life 5 29.03.2011 23:36
fakir + FAQ crimson Concerts 1 18.12.2010 11:38
Swiss FAQ website nqnln Other/general 2 19.07.2010 21:01
Grüezi Newcomer - An Expat's Guide for Zurich allegra_:) Daily life 1 15.09.2009 13:12
Faq Gregsyuk1 Forum support 4 05.08.2008 16:01


All times are GMT +2. The time now is 18:24.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0