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Old 16.06.2011, 06:11
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Complicated?

Hi,

I think this scenario isn't anywhere in the forum so let me describe it.

We're US citizens and married. My wife works for a Swiss bank in New York. I work as a contractor to that same bank in Zurich. They pay an agent in New York and they pay my LLC (just me).

My wife has been offered a 1 year assignment in Zurich. She has been approved for a B permit which means I get one too. I want to continue my current assignment which might be done at the end of this year or a little longer. I might get another position after that but directly.

What do I need to do if anything to continue with my current position? Just to reiterate I already have this position but I'll be changing my location to Zurich.

It really doesn't matter tax wise to me since I am still on the hook for US taxes which are higher than Swiss so I will get the credits on my US tax.

Would it make sense to have them prepay for the rest of the year?
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Old 16.06.2011, 09:00
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Re: Complicated?

Not sure if your post is very clear.

Are you saying that you are currently working in Zurich without a permit?

Are you resident in US or CH. If your wife comes here with a B permit, as her spouse you would also receive the same.
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Old 16.06.2011, 09:04
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Re: Complicated?

Can't answer the pre-pay question, but to this point:

Quote:
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Hi,
It really doesn't matter tax wise to me since I am still on the hook for US taxes which are higher than Swiss so I will get the credits on my US tax.
Depending on your situation, the choices you make in Switzerland may indeed matter. As you probably know, Switzerland has different tax rates by canton and town. Where you live determines how much or little CH tax you will pay. Living in a high tax canton/town - i.e., paying more Swiss taxes - means that you have a higher foreign tax credit on the US side - which may mean you are hit with AMT, raising your US taxes a fair chunk from what you would pay if still US resident.

We found that the solution that worked best for us was to live in a low tax canton/Gemeinde (SZ, the Höfe area). While we don't get the full benefit our non-US neighbors do (as we are still on the hook for US taxes), low CH taxes means we are able to better focus on tax planning on the US end. You should play around with various CH tax rates, get a feel for how high you can go before you get caught in the 'too large a deduction' cycle.

You can carry foreign tax credits forward for 5 years, so if you are not here for the long run this may not be much of an issue for you. Then again, we too came over for a 1-2 year stint... 13 years ago. You never know what lies ahead...

If your wife works for a bank, insist on tax planning advise as part of the relo package. You really need to understand your individual situation, and tailor solutions accordingly.
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Old 30.06.2011, 06:24
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Re: Complicated?

Thanks meloncollie. Didn't realize that affected AMT. Yes, we did indeed get tax advice included in the relo package. Our first go round with the accts neglected to mention a possible AMT issue. That's why it always pays to go speak with people that have gone thru this!
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