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Old Jan 31, 2013, 02:29 PM   #1
Don't panic
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taxes for US citizen in europe

a quick question for expatriates:
how does it work for US citizen that move to Europe in term of taxation?
I have heard contradicting tales. I know one has to file a tax return, but does that implies double taxation or anything one pays in the country of residence is detracted from US taxes. Or is it still different?

thanks
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Old Jan 31, 2013, 02:48 PM   #2
James Craner
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Its a pretty complex area, but in general most countries in the EU have double taxation agreements with the USA. The UK certainly has. In general terms the maximum amount of tax you would pay is the greater of the tax assessment in the EU country and the US. However it depends on where you are based and who pays you, and how long you are going to be in the EU. You will also need a work permit if you are thinking of working in the EU if you are not an EU citizen. In the UK it is not that easy to get a work permit because of the current economic situation, unless the role that you have is difficult to fill locally. You will need to get specialist advice. You are correct you generally get a tax credit if you end up being liable for tax in two countries at the same time under a double tax treaty.
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Old Jan 31, 2013, 06:01 PM   #3
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I haven't looked into all the details, but I know that there is a fairly large exclusion for money earned overseas so you don't have to pay taxes on it. this link might be of some help. http://www.irs.gov/Individuals/Inter...come-Exclusion
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Old Jan 31, 2013, 07:41 PM   #4
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Talk to a tax accountant familiar with the exact situation of your expat assignment.

You are not excluded from paying any US taxes if you are paid in the US and stationed abroad. Your income needs to originate from a foreign company in the country where you are working for there to be any exclusions.

In most cases you will be liable for tax in both countries, as well as taxed on your per deim abroad in the case of an extended stay.

Your company will have tax experts available. If they do not, I recommend Price Waterhouse Coopers.
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Old Jan 31, 2013, 09:15 PM   #5
Macky-Mac
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Quote:
Originally Posted by Don't panic View Post
a quick question for expatriates:
how does it work for US citizen that move to Europe in term of taxation?
I have heard contradicting tales. I know one has to file a tax return, but does that implies double taxation or anything one pays in the country of residence is detracted from US taxes. Or is it still different?

thanks
in MOST cases the Foreign Earned Income Exclusion means you wont pay US taxes on income earned while living outside the USA.....and if your employer provides funds for a housing allowance, there's also an exclusion for that as well.

currently the exclusion means you wont pay any tax for the first $95,000 you make
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Old Feb 1, 2013, 01:56 PM   #6
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thanks everyone,
very informative.
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Old Feb 1, 2013, 02:52 PM   #7
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foreign earned income only goes to $86,000 so if you're earning in euro you might reach it faster than you think.

If you work for the USG then you'll do taxes just like in the states.
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Old Feb 1, 2013, 03:18 PM   #8
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As long as you are a US citizen/permanent resident, then you have to pay US taxes no matter what country you work in. If you pay the host country's income tax, then you can deduct that amount from your US income tax to a certain amount.

Some people actually renounce their US citizenship because of this.
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Old Feb 2, 2013, 09:51 AM   #9
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it would be in academia, so i doubt it would ever reach the level where one can start to consider renouncing citizenship , not to mention that i might want to go back
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Old Feb 22, 2013, 02:02 PM   #10
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Old Feb 25, 2013, 06:05 PM   #11
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If you have questions, you should contact your local US Embassy for advice. That's part of the reason why they are there in the first place - to help US citizens living abroad.
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Old Feb 25, 2013, 08:04 PM   #12
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Quote:
Originally Posted by Vudoo View Post
As long as you are a US citizen/permanent resident, then you have to pay US taxes no matter what country you work in. If you pay the host country's income tax, then you can deduct that amount from your US income tax to a certain amount.

Some people actually renounce their US citizenship because of this.
You actually cannot renounce citizenship over paying taxes while working abroad, so if you use this as your reason, they do not let you loose and you still owe taxes.....
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Old Feb 25, 2013, 10:11 PM   #13
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I know i would have to file a return, but the question was how much taxes i would end up paying, and would i pay them both in the US and in the host country, on the same earnings.
and since this might affect my decision to move, i would rather know beforehand rather than going there and ask the embassy.

I am not against paying one's own share of taxes, and even high taxes for high incomes, but it seems crazily unfair that expatriates would have to pay double taxes (even after the partial deduction) on the same earned money.
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Old Feb 26, 2013, 12:17 AM   #14
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Originally Posted by Don't panic View Post
I know i would have to file a return, but the question was how much taxes i would end up paying, and would i pay them both in the US and in the host country, on the same earnings.
and since this might affect my decision to move, i would rather know beforehand rather than going there and ask the embassy.

I am not against paying one's own share of taxes, and even high taxes for high incomes, but it seems crazily unfair that expatriates would have to pay double taxes (even after the partial deduction) on the same earned money.
did you look at the IRS site about the Foreign Earned Income Exclusion? They have pretty clear information. If you're overseas for the qualifying time, you can earn up to $95,100 and get the exclusion......which means you WONT PAY USA TAX on any amount up to $95,100..........and if you're getting a housing allowance, you may get a credit for that too

The IRS, as much as we all hate them has some VERY CLEAR information for you

seriously read what the IRS has to say instead

And if you're earning more than $95,100.......why are you asking us instead of an accountant? and why should we care since that puts you so high up the percentile ranks
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