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Old 10.11.2016, 20:16
Join Date: Nov 2016
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US tax returns

Hey, I went through a number of useful discussion here on the forum, and wanted to confirm my understanding of the US taxation on my Swiss income before negotiating my salary:

Basically, I'd have 2 options (assume exchange rate = 1):

1) Claim foreign tax credit on the Swiss taxes I've paid: e.g. I owe IRS X$, paid to Switzerland Y CHF, hence will pay to IRS $X - YCHF, or
2) I claim income and housing deductions: e.g. if my salary is G CHF, then I can subtract $D = $100K + (my rent in Zurich) , and pay to IRS taxes on G - D (with the original tax bracket for exchange rate * G).

Given much lower tax rates in Switzerland, (2) should be a much better option, unless the salary number is ridiculously high. However, to use (2) I'd pretty much have to live in CH for a year, and won't be able to use during my 1st year here. Presumably I can still go with (1) for the year, when I get the salary both in US and CH. Also, I will be eligible for 6 months tax return extention from IRS to somewhat mitigate the higher effective tax rate for the moving year.

Does it sound right?
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