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Old 08.12.2014, 23:11
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US income tax on salary paid in the US but living in Switzerland

My wife (US citizen) and I (EU citizen) have been living in CH for a bit more than a year now. When my wife arrive here in fall 2013, she was still working for her US employer, and being paid just as if she still lived in the US.

Her employer however got us help on how to file income tax here, since she was living here on a B permit for the last 3 months of the year. We will likely have to pay some amount but haven't heard anything back yet.

On the other hand she had to file for US income tax a while ago, and so did it just the way she would normally as a US resident, since it was US income.

Now here is my question: since the swiss will likely tax part of the income for when she was working from Switzerland, how to we tell this to Uncle Sam and avoid double taxation? Especially since we don't know how much this is yet.

Any help will be greatly appreciated.
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Old 08.12.2014, 23:32
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Re: US income tax on salary paid in the US but living in Switzerland

You DON'T avoid double taxation. The US wants you to pay taxes on all your US income as well as your Swiss income. Mind you, you have to earn about $200k before it is taxable, but you still have to declare it all, plus , they want to know now much money you have in your Swiss bank account.
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Old 08.12.2014, 23:46
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Re: US income tax on salary paid in the US but living in Switzerland

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You DON'T avoid double taxation. The US wants you to pay taxes on all your US income as well as your Swiss income. Mind you, you have to earn about $200k before it is taxable, but you still have to declare it all, plus , they want to know now much money you have in your Swiss bank account.
Sure I'm aware of that very american peculiarity, but her total income for 2013 will not be above the threshold so that shouldn't be a problem. And she didn't have a swiss bank account either (paid in the US) so that's solved too.
My question is mainly about how to tell the IRS to subtract the swiss income tax from the US tax liability, all this after the original filing.
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Old 08.12.2014, 23:50
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Re: US income tax on salary paid in the US but living in Switzerland

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Sure I'm aware of that very american peculiarity, but her total income for 2013 will not be above the threshold so that shouldn't be a problem. And she didn't have a swiss bank account either (paid in the US) so that's solved too.
My question is mainly about how to tell the IRS to subtract the swiss income tax from the US tax liability, all this after the original filing.
You just submit a correcting tax return. It used to be called a 1040C but I think that name had changed. Basically, you just send all the same forms but with the updated information.
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