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Old 05.01.2007, 23:08
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Moving to Switzerland from Los Angeles

Hi all,

I have read a lot of posts here, and decided to join. It is nice to know there are others in a similar situation as me. Anyway, my name is Jessica, I am a native Californian married to a Swiss, we have 2 children (girls) ages 3 years, and 7 months. We plan on moving to Vaud this year. My husband is from there, and after 5 years here, he is ready to go home. He is finishing the U.S. citizenship process this year, after that's done, we are moving. I think the 2 things I will miss most about California is wearing flip flops all year, and my family. Other than that I think we will be quite happy there!!!

I have been to Switzerland 3 times (we just returned last week), and I absolutley love it!!! The hardest thing will be the language barrier, but I am working on learning french with CD's, DVD's, CD rom's etc... I am very excited that my children will go to school there, as the LA school system leaves a lot to be desired!!! I look foward to learning more about living in Switzerland.
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Old 05.01.2007, 23:19
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Re: Moving to Switzerland from Los Angeles

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Hi all,

I have read a lot of posts here, and decided to join. It is nice to know there are others in a similar situation as me. Anyway, my name is Jessica, I am a native Californian married to a Swiss, we have 2 children (girls) ages 3 years, and 7 months. We plan on moving to Vaud this year. My husband is from there, and after 5 years here, he is ready to go home. He is finishing the U.S. citizenship process this year, after that's done, we are moving. I think the 2 things I will miss most about California is wearing flip flops all year, and my family. Other than that I think we will be quite happy there!!!

I have been to Switzerland 3 times (we just returned last week), and I absolutley love it!!! The hardest thing will be the language barrier, but I am working on learning french with CD's, DVD's, CD rom's etc... I am very excited that my children will go to school there, as the LA school system leaves a lot to be desired!!! I look foward to learning more about living in Switzerland.
Ignoring basically everything, I must give you a warning. As American citizens (or your husband as a presumed-green-card holder before citizenship as well), you *both* are required to pay American federal income tax from abroad for the remainder of your lives or until the law is reformed. The deductions were reduced dramatically this past spring.

Other than that Vaud should be great, especially if your husband comes from there. With children so young, they should not have a major problem integrating -- especially in the so-called "Romandie." (My Swiss wife says so.)
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Old 05.01.2007, 23:33
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Re: Moving to Switzerland from Los Angeles

Thank you for the tip!! I will share the info with my hubby.
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Old 05.01.2007, 23:51
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Re: Moving to Switzerland from Los Angeles

I do not have to worry about these taxes for quite some time myself, as I will not be earning enough at my age (and as my qualifications are not the same in CH as in the US). However, I have to presume that your husband, at the very least, will face the full-brunt of this hidden Republican tax hike. I believe the deduction is $82,400 dollars per year (so around 100,000 CHF, but this is all entirely dependent upon the currency market and the value of the dollar) -- beyond that one is hypothetically fully liable *within that tax bracket* for taxes (so 28%) at that income before any taxes in the country of residence. In the past one would have begun beyond that number from zero, hence gone through all of the tax brackets instead of beginning so high. In addition, one must prove residency in the country outside of the US before such deductions are available -- and then wait one year (330 days to be exact) before this "full exemption" takes effect. I would recommend contacting a tax consultant... Then again I could just be taking the letter of the law too far

p.s. (Edit) Maybe there is an exemption for dual citizens, but I would doubt it if the law applies to those with American green cards that leave the US... but I would look into the tax situation first anyway if you guys have not thought of it

Last edited by spmull06; 06.01.2007 at 00:45.
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Old 08.01.2007, 17:42
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Re: Moving to Switzerland from Los Angeles

My mother in law told my husband about the taxes a while ago, but he never looked into it. Since I brought it up to him again on Friday, we decided to do some research over the weekend. My husband is now reconsidering citizenship. However, he is a permanent resident, and my understanding is that he, as a permanent resident would have to pay the taxes anyway even if his card is expired, and he can't use it!!! He has to inform the INS that he does not want the green card rights anymore, which then means we are deciding to never live in the states again. That is so crappy!!! If he does give up the green card, and I do not have a job there, do I need to claim his income??
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Old 08.01.2007, 18:18
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Re: Moving to Switzerland from Los Angeles

Does Switzerland not have a tax treaty with the US? I used one once but that was with the Netherlands.

Or do you have to pay tax regardless of the treaty or above the excepted amount? Anyway, maybe it is worth checking, as it might give an extra deduction at the least. I think admin.ch has all treaty texts.
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Old 08.01.2007, 18:59
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Re: Moving to Switzerland from Los Angeles

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Does Switzerland not have a tax treaty with the US? I used one once but that was with the Netherlands.

Or do you have to pay tax regardless of the treaty or above the excepted amount? Anyway, maybe it is worth checking, as it might give an extra deduction at the least. I think admin.ch has all treaty texts.
Going to do two response on this from how I've come to understand things -- I spent ages looking through the IRS website after reading about these changes last summer. There is a tax treaty, but it applies only to public healthcare (i.e. Medicare) and pensions (i.e. Social Security). Payments in CH forgo payments in the US and vice-versa. The federal government of the United States, however, taxes all income worldwide, whether you are a citizen of the US (with dual citizenship) or a permanent resident (i.e. you hold a green card).

All citizens and green-card holders are required by law to file yearly tax returns and do not fall under foreign residency "exemptions" until 330 days in said country. After those 330 days, one must pay all taxes above $82,400 a year (or whatever I said before, somewhere between $80- and 85,000 -- but that number sticks out). In the past, your income would then be reset, meaning that the first dollar above the former limit (it was raised slightly in the tax hike) would count as the first dollar earned -- i.e. one starts off at the very bottle of the tax scale.

However, under the new reform your $82,001 or whatever counts not as the first dollar ($1), but as the $82,401st! The exact bracket you fall into depends upon how your file, which is made even more complex by the fact that under Swiss law you are *required* to file jointly here for Swiss tax purposes, although that does not directly impact US taxes if I understand things correctly as you can still file separately there (I am not a tax specialist -- so take this as hearsay, which is why I said consult a tax advisor). From my reading of US federal law, my non-resident (no green card), non-passport holding wife (she has the red passport) could *OPT!* to pay US federal income tax, and if we file jointly in the US all of her income is actually liable for that tax. We will not be opening any joint bank accounts here in CH to avoid any confusion with the authorities -- probably me just being paranoid. In addition, there are a number of other deductions, including housing and I believe schooling -- you need to check. Since I looked into things the law was slightly reformed to increase these deductions, which had been drastically cut in the previous reform. (Reform reform reform)

I believe that one is also allowed to opt out of the exemption and possibly deduct federal taxes from the location you are in? I am not certain... but I do not think that Swiss federal taxes would be high enough to warrant this... No clue... Maybe one is allowed to include both cantonal and local taxes as well, but I would not presume so since such taxes also exist in the US. I'm going to visit a tax advisor if I ever actually earn enough money to warrant it -- but I can't imagine that happening for quite some time (and by then I'll probably be back in the US).

Again, look at my profile, I am 22, and this was just personal research I did last summer (so going from memory) because I was interested in the changes myself. I'd say just use this as a vague description.
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Old 08.01.2007, 19:02
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Re: Moving to Switzerland from Los Angeles

Quote:
My mother in law told my husband about the taxes a while ago, but he never looked into it. Since I brought it up to him again on Friday, we decided to do some research over the weekend. My husband is now reconsidering citizenship. However, he is a permanent resident, and my understanding is that he, as a permanent resident would have to pay the taxes anyway even if his card is expired, and he can't use it!!! He has to inform the INS that he does not want the green card rights anymore, which then means we are deciding to never live in the states again. That is so crappy!!! If he does give up the green card, and I do not have a job there, do I need to claim his income??
I can't tell you what would happen in that case, just that he would have to give up his green card to avoid paying federal income tax. Someone really needs to abolish this global taxation of US citizens and permanent residents.
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Old 08.01.2007, 19:04
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Re: Moving to Switzerland from Los Angeles

your husband will be entitled to a green card as long as he's married to you. He can give it up rather than file taxes.
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Old 08.01.2007, 19:59
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Re: Moving to Switzerland from Los Angeles

As an American citizen you need to file taxes, no matter where you live (if you make enough money, from what I understand - I think it is over $5,000/year). You are not double taxed if your income is below a certain threshold (I think $80k, again, double check my figures).

You would need to either file a joint return with your non-resident alien spouse *or* a married filing separately return, with just your return - which will put you into a slightly higher tax rate.

Even if your husband gives up his green card, I think he would have to file/pay taxes for 10 years. Citizens giving up their citizenship must do that, and if they think you've given up your citizenship just to get out of paying taxes, they make you file/pay taxes for life.
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Old 08.01.2007, 20:18
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Re: Moving to Switzerland from Los Angeles

Relax - it's not as bad as it sounds....

Yes, as US citizens and greed card holders you are liable for US tax even when resident abroad. However, there are indeed tax treaties between the US and Switzerland - in addition to the 82,000 or so deduction, you also may take credit for foreign taxes paid (that's total Swiss tax - federal, cantonal and local), reducing the US tax liability (in most cases) significantly.

You need to watch if/how you would be affected by the AMT, and, you need to understand if/how the new rules on housing deductions, etc. have changed your tax liability wrt your total compensation package.

As for qualification as a resident abroad - there are two ways to figure this out... the physical presence test (330 days) or the bona fide resident test. See a qualified tax advisor to see which is best for your situation.

And yes, starting 1 Jan 2006 the rate at which your US tax is assessed is figured on the total income before expatriate deductions, not on the taxable amount alone as had been done before.

Re: US state and local taxes - check to see if California is a domicile state, or not. If the state from which you expatriate is not a domicile state, you do not owe any state tax. If it is a domicile state, you may be liable even when resident abroad. (IL is not, so we pay no state tax.)

FYI, if you work a certain number of days in the US (10, I think, but someone correct me here) whilst a qualified overseas resident - attending business meetings counts here - your federal deduction is reduced by the number of days present in the US. Some states claim state tax for those days as well. This is not new, but more states are cracking down on filing for this.

Before making decisions you should get qualified tax advise in terms of your individual situation, from someone practicing BOTH Swiss and US taxation - it does get rather complicated.

But, it's not as bad as you may think.
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Old 10.01.2007, 01:17
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Re: Moving to Switzerland from Los Angeles

Thank you everyone for the valuable information!!!I suppose we have a lot of work to do, in addition to finding movers, we will need to find a tax consultant . But I still consider myself lucky to be able to live and raise my kids in Switzerland!!!
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Old 10.01.2007, 09:39
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Re: Moving to Switzerland from Los Angeles

Quote:
Thank you everyone for the valuable information!!!I suppose we have a lot of work to do, in addition to finding movers, we will need to find a tax consultant . But I still consider myself lucky to be able to live and raise my kids in Switzerland!!!
Good luck with the move! I am sure they're going to love it, especially in the Romandie!
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Old 10.01.2007, 11:34
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Re: Moving to Switzerland from Los Angeles

Dear Jessica

Welcome to your future home!!

A piece of personal advise, whatever you do, make sure your hubby gets his US citizenship before you come here; it will make life much easier in the long run, should you decide to return to the US as a family. With the new immigration laws, the INS is now keeping an eye of the so called green-card holders who are NOT living in the US for more than 6 months in a year and my understanding (from my lawyer) is that the INS has the right to take away your residency and give you a "visitor" visa if they find out that you are not living in the US. I don't know whether being married to an US citizen makes life easier on him or not, but I was told that the re-application of the green card is cumbersome and tedious......again, just what I heard from my lawyer, given that I have 2 senior parents who are US residents but for health reasons (we can't afford the US health crappy insurance), they are living and getting treated abroad.

Also, as for the tax situation, YES, it is really unfair that Uncle Sam has "rights" to your hard money earned abroad, but after the 82K, there are still loads of "deductibles" (for lack of a better name, don't quote me on this one) that you can take off (such as rent in CH, storage in the US, transportation, utilities, etc etc), before they actually get to an amount that they "tax" you on. But as everyone else has said, your best bet is to talk to an tax advisor who understand both rules (US and CH), and your personal financial situation. I have a tax advisor I can recommend if you are interested to speak to on the phone, she is here in CH. Please PM me if interested.

Cheers
Laifu
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Old 13.01.2007, 05:12
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Re: Moving to Switzerland from Los Angeles

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Good luck with the move! I am sure they're going to love it, especially in the Romandie!

Thanks again for the information, and I will take all the luck I can get with the move!!!
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Old 13.01.2007, 05:15
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Re: Moving to Switzerland from Los Angeles

Quote:
Dear Jessica

Welcome to your future home!!

A piece of personal advise, whatever you do, make sure your hubby gets his US citizenship before you come here; it will make life much easier in the long run, should you decide to return to the US as a family. With the new immigration laws, the INS is now keeping an eye of the so called green-card holders who are NOT living in the US for more than 6 months in a year and my understanding (from my lawyer) is that the INS has the right to take away your residency and give you a "visitor" visa if they find out that you are not living in the US. I don't know whether being married to an US citizen makes life easier on him or not, but I was told that the re-application of the green card is cumbersome and tedious......again, just what I heard from my lawyer, given that I have 2 senior parents who are US residents but for health reasons (we can't afford the US health crappy insurance), they are living and getting treated abroad.

Also, as for the tax situation, YES, it is really unfair that Uncle Sam has "rights" to your hard money earned abroad, but after the 82K, there are still loads of "deductibles" (for lack of a better name, don't quote me on this one) that you can take off (such as rent in CH, storage in the US, transportation, utilities, etc etc), before they actually get to an amount that they "tax" you on. But as everyone else has said, your best bet is to talk to an tax advisor who understand both rules (US and CH), and your personal financial situation. I have a tax advisor I can recommend if you are interested to speak to on the phone, she is here in CH. Please PM me if interested.

Cheers
Laifu
Thank you!!! when I am ready to go down that road I will definetly PM you , thanks again!!!

Jessica
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Old 17.04.2007, 01:17
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Re: Moving to Switzerland from Los Angeles

As long as you live on the french side or the italian side you are all set. I live on the german side and find people too cold and rude. I wish you all the best to you and your family and, welcome to switzerland!!!!
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Hi all,

I have read a lot of posts here, and decided to join. It is nice to know there are others in a similar situation as me. Anyway, my name is Jessica, I am a native Californian married to a Swiss, we have 2 children (girls) ages 3 years, and 7 months. We plan on moving to Vaud this year. My husband is from there, and after 5 years here, he is ready to go home. He is finishing the U.S. citizenship process this year, after that's done, we are moving. I think the 2 things I will miss most about California is wearing flip flops all year, and my family. Other than that I think we will be quite happy there!!!

I have been to Switzerland 3 times (we just returned last week), and I absolutley love it!!! The hardest thing will be the language barrier, but I am working on learning french with CD's, DVD's, CD rom's etc... I am very excited that my children will go to school there, as the LA school system leaves a lot to be desired!!! I look foward to learning more about living in Switzerland.

Last edited by evilshell; 17.04.2007 at 05:52. Reason: fixed quote/quote tags, removed special size and type of quoted text
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Old 17.04.2007, 07:34
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Re: Moving to Switzerland from Los Angeles

Hi and welcome back to CH.
About those flip flops, for the past few weeks, it has been flipp flop weather, so you'll be right at home.
What part of Vaud are you moving to?
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