# Tax compliant / Germany



## lucydan (9 mo ago)

Hi, my husband - a US citizen - lived and worked in Germany from 2014 until 2020, when he moved to the UK after we got married. He didn't realise until recently that he had to keep filing with the IRS.

1. Regarding the streamlining procedure, is it only the last three years the IRS is interested in?
In 2019, while single, he made less than the $12,200 threshold, however he made slightly over the threshold in 2017 and 2018. But would we only need to file 2020 and 2021?

2. In 2020, he would file married, filing separately. He made $13,000 while in Germany. Will the IRS charge a late penalty if he files 2020 now?

3. Will the IRS double tax him for the $13,000 he made while in Germany in 2020?


----------



## Bevdeforges (Nov 16, 2007)

The streamlined compliance procedure is basically: File current year (right now that's 2021) plus 3 back years (2018,2019 and 2020) plus 6 back years of FBARs (i.e. declaring foreign bank accounts if you have a total of at least $10,000 in any of the relevant years). The details are here: U S Taxpayers Residing Outside the United States | Internal Revenue Service

1. Technically, if your husband wouldn't have had to file in one of the back years, he could skip it. But when filing under the Streamlined procedures, it's probably best to just include a nominal return for the extra year, just to avoid any follow-up questions. 

2. Yes. For simplicity's sake, he should file taking the Foreign Earned Income Exclusion (FEIE) using form 2555. This allows him to simply "exclude" (formally) his earned income (salary, wages) earned while living overseas. Will render his taxable income $0 for the year, with $0 tax due and that's that. There is another option, where he could offset any US taxes with what he paid in German income taxes - but the FEIE is the fast and dirty way to cope with the Streamlined procedure. He can figure out in coming years whether taking the Foreign Tax Credit might work out better for him - but that's not normally until you have multiple sources of income and are in a somewhat higher tax bracket than it sounds like your husband is/was.

3. No - that's what the FEIE is for. (Actually, the FTC, too, but that's a bit more complicated.)


----------



## lucydan (9 mo ago)

Bevdeforges said:


> The streamlined compliance procedure is basically: File current year (right now that's 2021) plus 3 back years (2018,2019 and 2020) plus 6 back years of FBARs (i.e. declaring foreign bank accounts if you have a total of at least $10,000 in any of the relevant years). The details are here: U S Taxpayers Residing Outside the United States | Internal Revenue Service
> 
> 1. Technically, if your husband wouldn't have had to file in one of the back years, he could skip it. But when filing under the Streamlined procedures, it's probably best to just include a nominal return for the extra year, just to avoid any follow-up questions.
> 
> ...


Thank you. To clarify, filing Form 2555 would avoid the late penalties since there would be $0 tax due?


----------



## Bevdeforges (Nov 16, 2007)

Tax penalties in the US for late filing or payment are generally a %age of the taxes due. In any event, for any year that the amount of tax due is $0, the penalties would thus be $0.


----------



## Harry Moles (11 mo ago)

Added bonus, your husband should be able to collect $3,200 in stimulus benefits if he files his 2020 and 2021 returns.


----------



## MyExpatTaxes (10 mo ago)

lucydan said:


> Hi, my husband - a US citizen - lived and worked in Germany from 2014 until 2020, when he moved to the UK after we got married. He didn't realise until recently that he had to keep filing with the IRS.
> 
> 1. Regarding the streamlining procedure, is it only the last three years the IRS is interested in?
> In 2019, while single, he made less than the $12,200 threshold, however he made slightly over the threshold in 2017 and 2018. But would we only need to file 2020 and 2021?
> ...


Hello! Yep, you would qualify for the Streamlined Offshore Filing Procedure. It’s an amnesty program the IRS is offering at the moment. In a nutshell, you have to file 2019, 2020, and 2021 US tax return, plus your bank account reports for the last 6 years. Hope that helps!


----------

