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Old 16.04.2012, 00:17
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US Taxation / J1 scholar status

I have a question on my situation as J1 scholar from Switzerland. Since 2011 i am considered resident alien for tax purposes and when filling out my taxes for 2011 the system asked for the amount of money I have on a foreign bank account because I would have to declare that and pay taxes on it. I do have some amount on a swiss bank account from my pension fund which is obligatory in switzerland from my previous work in switzerland and now I wonder to what extent this might get taxed in the U.S. and at which rate?

This year I accepted a position in the U.K. and will move there end of April. Do I still have to pay taxes in the U.S. for this year (2012) as well and also for the money I will earn the rest of the year in the U.K.?

Thanks and with my best regards
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Old 16.04.2012, 09:46
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Re: US Taxation

I'm not a tax lawyer, but I am American, and have recently gotten some professional help with my taxes, so hopefully if I am mistaken about anything, it will be pointed out by the experts!

You need to declare the money your employer pays into your obligatory pension fund (pillar 2) as part of your foreign income. However, you can exclude $86,000 through the foreign earned income exclusion (form 2555 or 2555EZ).

This is a separate issue from declaring your foreign bank accounts (form TD F 90-22.1) in which you must declare the highest amount in all your bank accounts for the year (again including the pillar 2 account, and your renter's account).

And, yeah, you'll have to pay taxes in the U.S. for year 2012 on your worldwide income, as long as your tax status does not change upon your move to the U.K.
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Old 16.04.2012, 13:07
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Re: US Taxation / J1 scholar status

how is the FX rate calculated for the tax year 2011? just take the average per month of each month then /12, or is there an offiical rate?

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Old 16.04.2012, 13:29
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Re: US Taxation / J1 scholar status

You can use the IRS yearly averages, listed here:

http://www.irs.gov/businesses/small/...206089,00.html

Or, if you are paid on specific days you can calculate the exchange rate for that day. Here are some sites listed by the IRS web page:

http://www.irs.gov/businesses/small/...130524,00.html

In general, it's a good idea to jot down how you calculated US dollars, just for your own records.
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Old 22.04.2012, 10:47
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Re: US Taxation / J1 scholar status

just what i needed, thanks!
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Old 23.04.2012, 02:27
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Re: US Taxation / J1 scholar status

A little late.

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I have a question on my situation as J1 scholar from Switzerland. Since 2011 i am considered resident alien for tax purposes and when filling out my taxes for 2011 the system asked for the amount of money I have on a foreign bank account because I would have to declare that and pay taxes on it.
You're being asked the value of your foreign accounts to determine if you have a FBAR disclosure requirement. If there is no income derived from the accounts, there is no taxes. The US government is using the information to make sure the income is being properly reported.

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I do have some amount on a swiss bank account from my pension fund which is obligatory in switzerland from my previous work in switzerland and now I wonder to what extent this might get taxed in the U.S. and at which rate?
If you're a US resident, the interest is ordinary income at your marginal tax rate. I assume you do not receive obligatory employer contribution while you're student. Therefore, nothing is taxable in your pension.

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This year I accepted a position in the U.K. and will move there end of April. Do I still have to pay taxes in the U.S. for this year (2012) as well and also for the money I will earn the rest of the year in the U.K.?

Thanks and with my best regards
You'll be a dual status for 2012. Jan-April - resident (taxed on worldwide income). May-Dec - nonresident (taxed on US sourced income - presumably none, if you don't have workdays in the US after your move, or keep assets in the US).

FYI, I deal with expat tax.
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Old 23.04.2012, 02:29
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Re: US Taxation

You cannot use the foreign earned income exclusion while living and studying in the US, as the amount of the exclusion is dependent on how many days you spend outside of the US.

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I'm not a tax lawyer, but I am American, and have recently gotten some professional help with my taxes, so hopefully if I am mistaken about anything, it will be pointed out by the experts!

You need to declare the money your employer pays into your obligatory pension fund (pillar 2) as part of your foreign income. However, you can exclude $86,000 through the foreign earned income exclusion (form 2555 or 2555EZ).

This is a separate issue from declaring your foreign bank accounts (form TD F 90-22.1) in which you must declare the highest amount in all your bank accounts for the year (again including the pillar 2 account, and your renter's account).

And, yeah, you'll have to pay taxes in the U.S. for year 2012 on your worldwide income, as long as your tax status does not change upon your move to the U.K.
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