Federal Income Tax Return
In the case of unlimited income tax liability, tax return Form 1040 must be filed. Nonresident taxpayers with limited tax liability must file the tax return using Form 1040NR.
The streamlined filing compliance procedures are available to taxpayers certifying that their failure to report foreign financial assets and pay all tax due in respect of those assets did not result from willful conduct on their part. For eligible U.S. taxpayers residing outside the United States, all penalties will be waived.
Corporate Income Tax Return
A domestic entity electing to be classified as an association taxable as a corporation must generally file Form 1120, U.S. Corporation Income Tax Return, to report its income, gains, losses, deductions, credits, and to figure its income tax liability.
State Tax Return
Tax returns must be prepared for various types of taxes in each state.
Foreign Bank Account Report – FBAR
A U.S. person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report a financial interest in or signature or other authority over at least one financial account located outside the United States if the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.
Foreign Corporations – Form 5471
Certain U.S. citizens and residents who are officers, directors, or shareholders in certain foreign (i.e. non-U.S.) corporations may be required to file Form 5471 to report certain information with regards to those foreign corporations to the IRS. Individual taxpayers file Form 5471 as part of their U.S. income tax return (Form 1040).
Foreign owned U.S. LLCs (disregarded entities) – Form 5472
In case of a 25% foreign-owned U.S. corporation (including a foreign-owned U.S. disregarded entity), or a foreign corporation engaged in a trade or business within the United States, Form 5472 must be filed if the corporation had a reportable transaction with a foreign or domestic related party.
Estate & Gift Tax Return
For decedents who died in 2021, Form 706 must be filed by the executor of the estate of every U.S. citizen or resident:
a. Whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $11,700,000; or
b. Whose executor elects to transfer the deceased spousal unused exclusion (DSUE) amount to the surviving spouse, regardless of the size of the decedent’s gross estate.The estate tax is a tax on the transfer of property at death.
In certain cases, citizens or residents of the United States must file a gift tax return on Form 709 (whether or not any tax is ultimately due). The most common case where a Form 709 probably has to be filed is the giving of gifts to someone in totaling more than $15,000 (other than to your spouse).
Individual Taxpayer Identification Number – ITIN
The Individual Taxpayer Identification Number (ITIN) is a unique identifier for taxpayers who do not have a Social Security Number (SSN).
Frequently Asked Questions – U.S. Tax Basics (incl. Germany & Switzerland)
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U.S. citizens and green card holders generally must file annually if their worldwide income exceeds standard thresholds, even when they live outside the United States.
Possibly. U.S. taxation applies first; double taxation is mitigated by the Foreign Earned Income Exclusion (FEIE) and/or the Foreign Tax Credit (FTC), and by income-tax treaties with Germany and Switzerland.
It depends on your mix of earned vs. passive income and local tax rates. High-tax countries often favor the FTC; FEIE can help lower earned income. You can’t use the same foreign income for both benefits.
Citizens and green card holders are U.S. tax residents regardless of location. Non-citizens may be residents under the Substantial Presence Test unless a treaty tie-breaker applies.
Yes, if thresholds are met. FBAR (FinCEN 114) reports foreign financial accounts; FATCA (Form 8938) reports specified foreign assets. These are separate from your Form 1040 filing.
Treaties allocate taxing rights, reduce withholding on dividends/interest, and include tie-breaker rules for dual residents. They don’t remove U.S. filing obligations for citizens/green card holders.
Benefits are generally taxable by the U.S., with treaty provisions affecting sourcing and potential credits. Timing of accrual vs. distribution and pillar type (e.g., Swiss 1/2/3a) matter.
U.S. tax deferral (e.g., 401(k)/IRA) applies for U.S. purposes. Foreign countries may tax contributions or distributions differently; treaties can modify results but don’t guarantee matching treatment.
Often yes. Many non-U.S. mutual funds/ETFs are PFICs and can trigger punitive U.S. tax unless proper elections and annual Form 8621 reporting are made.
Equity compensation is typically allocated by workdays between grant and vest/exercise across jurisdictions. Treaties and employer withholding affect where tax is due and available credits.
Totalization agreements coordinate U.S. Social Security with German (Rentenversicherung) and Swiss (AHV/AVS) systems to avoid double contributions and protect benefit credits.
Possibly. Some states are “sticky” (e.g., CA/VA/NM/SC). Cutting state residency usually requires facts like domicile changes, property/disconnections, and new non-U.S. residency.
Yes, you may elect to treat the spouse as a U.S. resident for tax and file jointly, typically requiring an ITIN. This can lower tax but brings worldwide income into scope.
Credit amounts and refundability depend on income, residency, and filing status. Children must generally have SSNs; days abroad can affect eligibility for certain refundable portions.
Taxpayers who claim FEIE and have qualifying housing expenses in a foreign location may exclude amounts over a base limit, subject to city-specific caps published by the IRS.
Itemized deductions for qualified residence interest and certain taxes may apply to foreign homes, subject to U.S. limits (e.g., SALT caps and mortgage debt limits).
Often yes. U.S. owners/beneficiaries may have filings like Forms 5471/8865 (foreign corps/partnerships), 3520/3520-A (trusts), and possibly GILTI/Subpart F inclusions for certain corporations.
U.S. citizens are generally subject to U.S. estate/gift rules worldwide. Germany/Switzerland may impose separate inheritance/gift taxes; bilateral estate tax treaties can affect outcomes.
Remediation options may exist (e.g., reasonable cause, delinquent procedures). Timely action can reduce penalties; professional guidance is recommended before contacting the IRS.
We support U.S. taxpayers with Germany/Switzerland connections. For personalized assistance, please contact us.
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