# Tax Accountant for German/US Taxation (Tax Convention)



## Kathi_1013

Maybe somebody can help me finding a good and reasonable International Tax Accountant? I am German and got my Green Card in December 2013. Hence, due to being a resident of the US I need to claim all my German assets and income in the US. I have no idea how to handle it, and what the rules are. 
Therefore, I am looking for a tax accountant in San Diego, who can handle my my German/US tax issue - who has an idea how to deal with the tax convention (double taxation agreement between Germany and the US).
So far, I did my tax returns separately: My tax return in Germany, for all my German assets, and I also did a US tax return, encompassing my US income.
Thank you! K


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## Bevdeforges

Do you actually have to do a German tax return? (Depends, I guess, on how long you have been in the US.) But for Germany, I believe you're only taxed if you are resident and/or have German source income.

For the US, you must declare your worldwide income once you are resident. You then take the Foreign Tax Credit for any income taxes you have paid in Germany. 
Cheers,
Bev


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## Kathi_1013

Bev, 
Thanks for responding.
I do have a rental in Germany and also still have a part-time job in Germany (paying automatically every month taxes on my earnings), besides having a bank account, etc. Hence, what do I need to claim in my German tax return, and what do I need to consider for my US tax return. 
Due to having had a Student Visa for nearly 4 years, and getting my Green Card in Dec. 2013 I spend more than a half year per year in the US. 
Also, what happens if I'm doing my tax return in Germany, not in the US? 
I have a tax accountant in the US, for my US income, who says I don't need to file any assets/income from Germany at all. Furthermore, she said I 'only' need to pay taxes on my US income. 
I'm completely lost and I'm looking for a tax accountant (in San Diego, California), who can do my US tax return, including considering all my German assets/income, etc. Do you have any idea where to find a good international tax accountant in San Diego, California?
Thank you! K


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## Bevdeforges

There is a tax treaty between the US and Germany - and Germany is one of those countries that taxes based on residence, not citizenship. That said, however, the usual situation is that your "first" tax obligation is to the country where the income comes from. Most likely, you should be paying taxes in Germany on your rental property there and on the part-time job. Period.

As a green card holder, you must declare your worldwide income on your US tax forms (your tax accountant is wrong about not having to file on your German income - but right in that you don't file based on assets in Germany, other than any income they produce) - and then you'll take the tax credit for the taxes you have paid in Germany on the rental and part time job income. 
Cheers,
Bev


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## Kathi_1013

*German/US Tax Treaty*

Hi Bev,
Thanks for responding!
So that means I have to do my German tax return in Germany, as I did all those years? 
And having done this I would take my German tax return (which shows that I paid taxes on my German income), to an US tax accountant, who declares my German income, including my tax credit? 
Usually the tax bracket in Germany is hight, compared to the US. Hence, I'm assuming I don't have to pay any additional taxes on my German income here in the US? 
I'm going to Germany soon to do my German tax return. Therefore, what tax correlated documents do I need to bring from Germany to do the US tax return? In other words, what does an US tax accountant asks for, what papers does he need to see from Germany?
Thanks again!
Cheers, K


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## CharlieChan

Kathie, don’t forget to report your German bank account for the year 2013 if you have more than USD 10000 (Which is peanuts in Europe) This is very important because this is where you could get real huge penalties from the US Gov. Check this on Google: FBAR (Foreign Bank Account Report FinCEN 114) and this “IGA GERMANY USA” BTW I was thrown out of my local Deutsche Bank in Belgium because they don't want to have any US customer or green card holder compliant or not. Same for AXA and a few other banks but this is another problem.


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## Bevdeforges

Kathi_1013 said:


> Hi Bev,
> Thanks for responding!
> So that means I have to do my German tax return in Germany, as I did all those years?
> And having done this I would take my German tax return (which shows that I paid taxes on my German income), to an US tax accountant, who declares my German income, including my tax credit?
> Usually the tax bracket in Germany is hight, compared to the US. Hence, I'm assuming I don't have to pay any additional taxes on my German income here in the US?
> I'm going to Germany soon to do my German tax return. Therefore, what tax correlated documents do I need to bring from Germany to do the US tax return? In other words, what does an US tax accountant asks for, what papers does he need to see from Germany?
> Thanks again!
> Cheers, K


When you say you had a part-time job in Germany, do you mean you were working last year in Germany? Or were you "telecommuting" the job while living in the US?

You only need to file a German tax return for your German source income (and salary is considered to be earned in the country in which you are physically located while performing the work). 

Your German tax return has little or no relevance for your US return, however. The amounts you will have to report for US tax purposes are different from what you report in Germany. (For example, you cannot deduct your social insurances from your gross pay for your US return.) You should bring any documents with you that show the gross amounts you have earned, payslips, bank statements, your copies of any receipts issued in connection with the German rental property.

But if you only got your green card in December, 2013, you can pretty much delay all the "hard stuff" until next year when you file your 2014 return. (Technically, you will be considered a "dual-status alien" for 2013 - so basically, you'll be doing your tax returns pretty much the same way you have done for the last few years.)
Cheers,
Bev


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## Kathi_1013

*German/US Tax Treaty*

Thanks for all the valuable information to everybody, who responded!

Bev,
To answer your question, yes, I was working part-time in Germany/or from the US for a German business. For instance, when going to Germany once in a while it turns into a kind of business trip while doing some administrative work in Germany. Also, sporadically I work via telephone call and/or email. Therefore I collect a monthly paycheck, which automatically is taxed every month in Germany, and also automatically deposited into my German bank account. As mentioned, the last year I was living in the US more than a half year. 
And, I hope you don't mind asking, do you think I don't need to claim my German assets/income while doing my US tax return for 2013, since I got my Green Card Mid-December 2013. Hence, would it be ok to start claiming all my German assets/income when doing my 2014 US tax return? 
Thank you!
Cheers, K


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## Bevdeforges

I'm not sure what you mean by claiming your "German assets" - the US income tax return is strictly income. 

For 2014, you will need to declare any and all German bank accounts (and investment accounts, should you have any over there) on an FBAR report. But that's next year's tax filings, and actually the FBAR is separate from the tax filings.
Cheers,
Bev


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## Kathi_1013

*German/US Tax Treaty*

Hi Bev,
Thanks for responding once again!
In summary, I do my German tax return (in Germany) as usual for all my German income, - and I'm "only" declaring all my German bank accounts on an FBAR report? 
That means, I don't need my German tax return information to do my US tax return?
At the beginning of each year I am getting a summary from my German Bank (to do the German tax return), which encompasses all my German accounts of the previous year (including private account, rental property account, and savings accounts, also including interest paid, etc.). 
Hence, the information included in the Bank summary should be the only thing I need to declare in the US? 
And, I would not need to declare any German income (since it is already taxed in Germany)? 
Thank you!!
Cheers, K


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## Bevdeforges

The one big "no" is your last statement. 

For US taxes, as a resident, you must declare your worldwide income, which includes all income from Germany. What I'm not so sure of is what your tax status is for 2013, seeing as you just got your Green Card in December. 

But in any event, be careful about using your German statements for income when it comes to US taxes. There are differences in how you report income for US vs. German tax returns. Simple example: IIRC in Germany you are allowed to deduct your social insurances from your gross income before you calculate your taxes. In the US, you report your gross income before any reductions for health care or other benefits or withholdings.
Cheers,
Bev


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## BBCWatcher

Dual status alien.


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## Kathi_1013

*German/US Tax Treaty*

Hi Bev,

Thanks once again!

Meaning, I have to do my German tax return in Germany, as usual; and I also need to declare my German income, including Bank Accounts, in the US, besides declaring my US income? However, I'm assuming I won't be taxed twice, in Germany and in the US?

Anyway, receiving all the information I wouldn't know where and how to start working on my taxes. Hence, if there is any tax accountant (firm) in San Diego, California, that is familiar with the tax treaty between the US and Germany, please let me know. Thank you!

Cheers, K


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## Bevdeforges

You probably don't need someone familiar with the US-German tax treaty. Your situation is fairly straight-forward. Check around (maybe your local library or the schools/universities in the area) to see if there is a VITA program nearby. VITA = Volunteers in Tax Assistance and they should be able to properly set up your US tax return so as avoid any double taxation.

Or find yourself an Enrolled Agent - another form of tax preparer, usually a bit less expensive than a tax accountant and specialized in tax work. https://portal.naeacentral.org/webportal/buyersguide/professionalsearch.aspx
Cheers,
Bev


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## Kathi_1013

*German/US Tax Treaty*

Bev,
Thanks so much for the information! 
Cheers, K


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## FFMralph

Kathi,
first of all, like everyone has already said, you must declare your german bank accounts in excess of $10k to the Dept of Treausury and if in excess of $50k to the IRS (Form 8938).

You have to (should) prepare a german tax return on any salary that you earned from a german firm located in Germany. These earnings can be excluded/deducted from your US tax return using FEIE (Form 2555) or a tax credit can be taken using the FTC (Form 1116, General category). I use the amounts (which I convert to dollars) which are shown on my "Lohnsteuerbescheinigung" for entering on my US tax return. By the way, the german "Solidaritätssteuer" can be added to the paid german income tax.

If you earned any interest from your german accounts, you may or may not have paid german tax on it. German tax on interest "Kapitalertragsteuer" is usually not charged if you earn less than 1370 €. If you did pay it, you can only take a tax credit on this amount using the FTC (Form 1116, Passive category). If you received tax info from your bank, it will only concern this tax. A german bank will not send you any other tax Information.


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## Kathi_1013

*German/US Tax Treaty*

Thanks so much for the valuable information!
Since I definitely need to prepare my German Tax return (in Germany), in order to use the resulting “Lohnsteuerbescheinigung, Solidaritaetsbescheinigung, and Kapitalertragssteuer” for entering the amounts on my US tax return, I would need more time. 
Hence, do you think the US Government/IRS allows an extension of my US tax return (lets say until September 2014, instead of April 15, 2014), including declaring all my German income, assets, etc.? I'm still looking for a tax accountant in San Diego, CA, who can help me with the issue. 
Cheers, K


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## Lukoscha

HI there,
I am completely lost with all what refers to US Income form e as a german / american.
I just earned money in Germany for all my live , and I am terrified of these Penalties and Stuff they write on their Web Site ( IRS etc. ) .
I am calculating up and down which Income I have to declare, but all I have is my German “Lohnsteuerbescheinigung”.
What is income there ?
“Bruttoarbeitslohn” I would assume
“Steuerfreie Verpflegungszuschüsse” bei Auswärtstätigkeit really that is Income for US ?
“Arbeitsgeberanteil zur gesetzlichen Rentenversicherung” really that is Income for US ?
„Steuerfreie Arbeitgeberzuschüsse zur gesetzlichen Krankenversicherung „ is that Income as well ? ( hard to believe … )
What is Tax Credit ?
„Lohnsteuer“
„Solidaritätszuschlag“
Something else I can claim/deduct ?
Please help, I am about to loose my mind:sad::sad::sad:


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## Bevdeforges

Well, the easy answer is that just about everything is "income" for US tax purposes. There is very little recognition of "tax free" payments in other countries. However, on the IRS website, download publication 525 which explains taxable and non-taxable income. One big category of non-taxable (non-declarable) income is public benefits you receive because of need. It's very hazily defined, but based on the example they give in the publication, you very well may be able to not declare various forms of sickness benefits. 

You also want to look at excluding all your "earned income" (i.e. salary) using form 2555 (Foreign Earned Income Exclusion) - see Publication 54 for more information about this, as well as about the Foreign Tax Credit, which may be applicable or useful in your case.
Cheers,
Bev


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## Nononymous

I am guessing from the post that you are a US (or dual US/German) citizen who has lived and worked in Germany for most of their life, and who perhaps has only recently discovered the obligation to file US taxes? If this is correct, do not panic. The US government did not about you before, they don't know about you know, you will not be penalized. Take your time, relax, and read IRS Pub 54 and determine your best course of action.


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## Lukoscha

*Thanks and*

:fingerscrossed:

Bev and Nonanonymous firstly thanks for your fast replies.
I am still crunching numbers while reading P54.

Yes, I was born in 1977 and left the US 1977 - 7 months after my birth. I once got a SSN in 2002 during a holiday but never worked, resided or had any kind of income in the USA. Never heard from IRS or anybody else since then. 
Fact is, I am exceeding the FBAR limits ( everybody with some age preparing funds in Germany or somewhere else does that ) , but I will have to trust on the CPA I just found and on some common sense of the IRS not charging me several 100.000 US$ for having some Age Funds or Pension Plans or Life Insurance whose accumulated value does not even exceed 40.000 $ :fingerscrossed:


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## Nononymous

The IRS doesn't know you exist. Relax.

You almost certainly won't be penalized should you try to become compliant. (And if they did, hey, how can they collect in Germany? They can't collect from Canadian duals in Canada.)

Look into the FATCA rules and see if there's any chance of your accounts being reported to the US. If yes, slowly and patiently become compliant, without fear of being penalized. If no, decide whether you want or need to become compliant. You've been off the radar this long, it's likely not a big deal.


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