# In Germany Filing for the First Time



## h00ls05 (Apr 3, 2014)

Hi all, 


I've already browsed around this Forum and found some excellent advice - thanks to all contributors and those who asked 

I moved to Germany permanently in January of 2013, have since had a German employer and made well under the maximum 97.600 USD.

I have filled out my 2555-EZ and 1040 (I ended up with '0' in line 22 of the 1040)

I've been reading that I have to fill out either the 2555 OR the 1116. Is this true? I don't have any other income (passive or general category) than the one I already reported on 2555.

I'm relatively young (in my employed years), don't have any investments or 4 accounts in different countries, and am filing single. I don't have that many numbers to report, so I'm wondering if I worry too much about forms and fields I don't need?

the examples in pub 54 all seem to be geared towards people who earn a lot more than me and have much more complicated financial lives?

I know I still need to file fbar electronically but is there anything else I'm missing?

thanks a lot for any advice or input
Julia


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## Bevdeforges (Nov 16, 2007)

You don't HAVE to do anything - certainly not take either the FEIE (2555) or the FTC (1116). But if you've already done the 2555EZ and the 1040 (if you take the FEIE, you do have to fill out the long form 1040) and line 22 comes down to 0, just carry that figure down to line 37, turn the page and finish filling out the form.

You do need to file the form - even if your taxable income comes down to 0. (The filing thresholds are based on your gross revenue before you apply any deductions, exemptions or exclusions.)
Cheers,
Bev


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## h00ls05 (Apr 3, 2014)

Hi Bev, 

thanks a lot for your help! Why would I not need to file the 2555(EZ)? 

I'd still have to file fbar though, correct?

Thanks
 Julia


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## Bevdeforges (Nov 16, 2007)

h00ls05 said:


> Hi Bev,
> 
> thanks a lot for your help! Why would I not need to file the 2555(EZ)?
> 
> ...


You have to file a 2555 form (EZ or not) if you want to take the FEIE. If you prefer to rely on the FTC instead of the FEIE, you'd only file the 1116 along with your 1040.

Or, if you don't mind paying double taxes, you can just file the 1040 without either form (2555 or 1116). 
Cheers,
Bev


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## minuteman (Apr 5, 2014)

*regarding your FBAR question*

Who Must File an FBAR

United States persons are required to file an FBAR if:

The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
The *aggregate value of all foreign financial accounts* exceeded $10,000 *at any time during the calendar year* to be reported.

United States person includes U.S. citizens; U.S. residents; entities, including but not limited to, corporations, partnerships, or limited liability companies, created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.


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## Zendo (Apr 25, 2013)

*2555 and/or 1116*



Bevdeforges said:


> You have to file a 2555 form (EZ or not) if you want to take the FEIE. If you prefer to rely on the FTC instead of the FEIE, you'd only file the 1116 along with your 1040.
> 
> Or, if you don't mind paying double taxes, you can just file the 1040 without either form (2555 or 1116).
> Cheers,
> Bev


Hi
Under what conditions can one file both 2555 and 116? I heard that might be possible under certain conditions. Are there such conditions? What exactly is the criteria for choosing one over the other?


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## Bevdeforges (Nov 16, 2007)

Zendo said:


> Hi
> Under what conditions can one file both 2555 and 116? I heard that might be possible under certain conditions. Are there such conditions? What exactly is the criteria for choosing one over the other?


Basically, if you have both earned income (i.e. salary) and "unearned income" - or when your earned income exceeds the maximum FEIE (around $97,000 these days).

The FEIE is applicable only to "earned income" - as defined in Publication 54. So if you wind up having to pay tax due to investment or interest income, you would want to apply the foreign tax you've already paid against whatever tax the US is claiming you owe. 

I haven't checked the instructions recently, but I think I recall that you have to file a separate 1116 for each source of income - and thus you apply the foreign taxes you paid only to US taxes due on the same category of income. It can get tricky.
Cheers,
Bev


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## Zendo (Apr 25, 2013)

*More than enough*



Bevdeforges said:


> Basically, if you have both earned income (i.e. salary) and "unearned income" - or when your earned income exceeds the maximum FEIE (around $97,000 these days).
> 
> The FEIE is applicable only to "earned income" - as defined in Publication 54. So if you wind up having to pay tax due to investment or interest income, you would want to apply the foreign tax you've already paid against whatever tax the US is claiming you owe.
> 
> ...



Thank you for the quick reply. Does that also mean, that when one earned, let's say, 97,500 it would be advisable to use the 1116 form?


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## minuteman (Apr 5, 2014)

Zendo said:


> Thank you for the quick reply. Does that also mean, that when one earned, let's say, 97,500 it would be advisable to use the 1116 form?


Hi Zendo,

you should definitely calculate both with and without FEIE and see how these differ in your specific case. There is no general rule.

But let's just say you had $97,500 in income and no other income whatsoever (e.g. interest, divedends, ...) then FEIE is probably still fine. If you exclude $97,000 from your income then you remain with $500 income on which you likely do not pay tax (after deduction and exemption)

PS: the FEIE limit for 2013 is actually $97,600 not $97,000 (it changes every year).


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## Bevdeforges (Nov 16, 2007)

Zendo said:


> Thank you for the quick reply. Does that also mean, that when one earned, let's say, 97,500 it would be advisable to use the 1116 form?


If you've got enough "foreign" tax paid to cover the tax that comes due because of your exceeding the limit. 
Cheers,
Bev


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## FFMralph (Dec 22, 2012)

I file both the FEIE and the FTC. The FTC for the amount of earned income over the foreign earned income limit and for my passive incomes. I find, that if I would only take the FTC, I am more likely to fall into the Alternate Minimum Tax (AMT) tax trap. That is why, (in my case) it is advisable to take less tax credits by reducing my taxable income by utilizing the exclusion.


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