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Old 03.06.2020, 23:50
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Paying US tax on Swiss income if $150,000??

Hi, does anyone have any rough idea how much percentage/ or $ amount you would pay in US taxes on an income of Fr.150,000? Does anyone have any experience in this area?

We are planning to move back to Switzerland, and I had been doing budgeting and trying to think of all the issues that would make come up, but I had forgotten that my husband would have to pay tax on his income as he is half American! This could throw a spanner in the works! Does anyone have any idea how much we might have to pay?? Thanks for helping!
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Old 04.06.2020, 01:25
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Re: Paying US tax on Swiss income if $150,000??

Hey

I can't help you with the tax amount but would share something.

A relative of mine who was an American national was working in Dubai earning above $100k. Dubai has zero income tax but he was forking the US tax to IRS, while working in Dubai. Since he was a dual Canadian/American, he elected to forego American citizenship. Over the last 10 years in Dubai, he claims to have saved a fortune (boastfully!). US remains the only developed country that taxes non-resident Americans. Couple of weeks ago, I read that a Canadian legislator has been lobbying for Canada to adopt a similar tax approach. If so, I think my relative will be stateless

Now, this may be provocative to some and not completely doable if you don't have dual citizenship but offers some perspective to the length one maybe will to go to avoid taxes
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Old 04.06.2020, 02:24
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Re: Paying US tax on Swiss income if $150,000??

This might help..... has some examples.

https://www.americansabroad.org/us-t...ummies-update/
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Old 04.06.2020, 06:57
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Re: Paying US tax on Swiss income if $150,000??

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Hi, does anyone have any rough idea how much percentage/ or $ amount you would pay in US taxes on an income of Fr.150,000? Does anyone have any experience in this area?

We are planning to move back to Switzerland, and I had been doing budgeting and trying to think of all the issues that would make come up, but I had forgotten that my husband would have to pay tax on his income as he is half American! This could throw a spanner in the works! Does anyone have any idea how much we might have to pay?? Thanks for helping!
If he has a job he should already be filling in US tax returns.

There are several double taxation treaties between Switzerland and the US which might mitigate things a bit, but you/he also need to consider that your banking choices here will be limited by his nationality since most banks won't touch Americans with a barge pole. Getting a mortgage may be problematic as well if you're thinking along those lines.

Unless he has a pressing reason to hang on to the citizenship, it's probaby better in the long run to just renounce and be done with it. It'll cost him $2,450, but may be cheaper in the long run than filling out returns, possibly owing the US tax and maybe needing to pay a tax expert to help get it all right each year.
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Old 04.06.2020, 11:39
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Re: Paying US tax on Swiss income if $150,000??

Nobody actually tried to answer the question! Probably renouncing one's citizenship is not a universal solution for everyone.

I could not say the percentage because I am no expert, but the first 100,000 or so is excluded by the Foreign Income Exclusion, or you can take the Foreign Tax Credit (whichever one lowers your taxes the most.) The taxes you pay on that income shouldn't be enormous. It's aggravating, but not a good reason not to make the move. You'll probably still have more leftover at the end of the year after living in CH.
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Old 04.06.2020, 13:42
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Re: Paying US tax on Swiss income if $150,000??

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the first 100,000 or so is excluded by the Foreign Income Exclusion
Plus housing exclusion (32k or more, depending where you live), and other deductions easily push you over 150k gross without having to pay, espcecially if you have children and a spouse.

Tom
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Old 04.06.2020, 14:12
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Re: Paying US tax on Swiss income if $150,000??

I want to second that you'll probably end up paying nothing or close to nothing for that income. You do need to remember that you'll still have to make a tax return each year.

What some people do is pay a professional to make a tax return for one year and then they do it themselves the subsequent years with prepared returns as a template.
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Old 04.06.2020, 14:44
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Re: Paying US tax on Swiss income if $150,000??

Your husband is an American citizen, correct? Are you a US citizen?

If it is only your husband, I suggest the following:

1. Have a separate bank account for your salary. No need to have the US tax that as part of your husband's salary. For us, we have a bank acct for my wife (non-American) and a joint one for both of us. Her salary goes into her account. The US took away her green card (she wanted to keep it), so no need for them to get part of her money

2. It seems you are thinking your combined income will be 150,000. I am guessing with deductions and all, your husband's part of combined salaries will be under the foreign tax credit limit and not have to pay taxes. Even if I am wrong, he only pays the difference between the US and CH. That will be negligible. We used to live in Neuchatel (one of the highest tax cantons) and I never owed more than about $700 to the US.

3. Make sure he still files a US tax return. I use an online service that costs $350. Never had any issues in the 5 years I have used them.

4. Make sure your husband files as individual (not married couple) on US tax.
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Old 04.06.2020, 19:55
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Re: Paying US tax on Swiss income if $150,000??

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3. Make sure he still files a US tax return. I use an online service that costs $350. Never had any issues in the 5 years I have used them.

4. Make sure your husband files as individual (not married couple) on US tax.
3. and the FBAR!
4. not individual as in single, but individual as married filing separately. Keep in mind this type of filing does mean certain deductions are not allowed, such as student loan interest.
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Old 05.06.2020, 13:07
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Re: Paying US tax on Swiss income if $150,000??

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Hi, does anyone have any rough idea how much percentage/ or $ amount you would pay in US taxes on an income of Fr.150,000?
Here's feedback assuming your US-citizen partner is primary earner, your income is minimal, and the income is earned (like salary) and not passive like capital gains, trust fund, social benefits, etc.
1. You will need two separate filings - one for taxes to IRS (Form 1040), and one for Form114/FBAR to US Treasury (as noted by 3Wishes above)
2. For IRS: You'd likely pay $2k or less. Probably makes sense to file married jointly to get higher standard deduction. Primary forms you need will be 1040 and 2555 to exclude foreign income. On $150k, in future years you'll likely be able to exclude around $110k income and another $25k as standard deduction. With $15k net taxable income, rate would be at around 12% so $1.8k due.
3. For US Treasury: FBAR almost certainly needed since you'll likely have more than $10k in foreign bank accounts (banks, pension funds, rental deposits, etc.) Not difficult if you keep good records but good news is no taxes or fees if you file accurately and on-time.
Hope this helps!
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Old 05.06.2020, 13:51
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Re: Paying US tax on Swiss income if $150,000??

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Here's feedback assuming your US-citizen partner is primary earner, your income is minimal, and the income is earned (like salary) and not passive like capital gains, trust fund, social benefits, etc.
Remember that if you choose to treat the non-U.S. spouse as a U.S. person for tax filing purposes (i.e. filing jointly), it remains that way forever unless you explicitly request to change back to a non-U.S. person again. The non-U.S. spouse would also need to file the FBAR since they're choosing to be treated as a U.S. person. They'd also need to declare to their Swiss bank they are a U.S. person for tax purposes.

Not worth it for me, but for some it might be worthwhile to file jointly.
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Old 05.06.2020, 14:31
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Re: Paying US tax on Swiss income if $150,000??

Thanks everyone for the helpful comments so far - I guess I should have put more details to help with narrowing down the info

My husband was raised in Germany to Swiss/American (mother) and he didnít realise he had to pay taxes until just last year when she moved to the states and we found out - so we started last year. He is American/Swiss and Iím Kiwi - he is the only earner at this stage so that makes it simpler for filing i guess?


Thanks!!
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Old 06.06.2020, 10:49
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Re: Paying US tax on Swiss income if $150,000??

Keep in mind that pension plans including employer contributions must also be declared as income.
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Old 06.06.2020, 12:08
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Re: Paying US tax on Swiss income if $150,000??

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Keep in mind that pension plans including employer contributions must also be declared as income.
And the actual pension payments once you are retired do not count as earned income for the FEIE.
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