Taxes for US citizens

US citizenship-based taxation, FBAR/FATCA, the tax treaty; general information, no tax advice.

You file in the US even if you live in Berlin

• The US taxes its citizens on worldwide income, wherever they live. A US citizen abroad generally still has to file an annual return (IRS: US citizens and resident aliens abroad).
• Relief exists, for example a foreign earned income exclusion and a foreign tax credit. They are not automatic and must be claimed on the return. Conditions and amounts change yearly; use the IRS pages.
• Filing deadlines for taxpayers abroad differ from the standard April date. Check the current IRS rule.
• State income tax can still apply if you keep a US state domicile; depends on the state.

You are also taxed in Germany

Persons with a residence or habitual abode in Germany are taxable on worldwide income (§§ 8, 9 Abgabenordnung; § 8 AO). You receive a tax ID after registering your address. Employees have income tax withheld; freelancers register with the tax office: Freelance.

Double taxation treaty

A Germany-US income tax treaty exists to avoid double taxation (IRS: Germany treaty documents). The treaty contains a "saving clause" that lets the US keep taxing its citizens; it works mainly through credits. How it applies to your income type (wages, pension, capital gains, US retirement accounts) must be checked per case.

Foreign accounts: FBAR and FATCA

• FBAR (FinCEN 114): US persons with foreign financial accounts above a threshold in total (generally $10,000 at any time in the year) must report them (IRS: FBAR).
• FATCA (Form 8938) is a separate reporting duty with different thresholds (IRS: FATCA).
• German banks sometimes refuse or restrict accounts for US persons because of these rules. Practices differ by institution; we name none. If a bank refuses, ask others, or ask about a basic account (Basiskonto).

Social security

Pension and health contributions: Social security and health.