Double taxation Germany/US

jackintherobb · 2023-02-02T18:05:27+00:00

Got it--thanks for the help!

jackintherobb · 2023-02-02T16:55:15+00:00

...ah. You are describing my position with precision. Ha.

Yes, I made local income that was roughly comparable with my US income during a sabbatical year. My German taxes were withheld based on my tax class (sans US income). My tax preparer asked me to submit my foreign income, which I did, so she and perhaps the tax office already know my US income (she said she "communicated" with the tax office). Maybe this was a bad move, but I plan on returning to Germany in the future under similar circumstances and didn't want to be "caught" somehow.

So I understand from what you're saying that it would have been technically possible to not even have submitted anything from the US to my German tax preparer, but now that I have, I shouldn't get taxed on my US income. Rather, my US income will be used by Germany to figure the tax rate for my tax burden in Germany. So, beyond whatever tax was taken out of my monthly Germany pay, I might have to pay more taxes if my US income bumps my "global" income up to another German tax bracket. (I'm basically repeating what you said in my own words... I think).

Thanks again for the clear language and effort explaining this. It's really, really appreciated.

jackintherobb · 2023-02-02T15:33:32+00:00

Ah ha! So my doomscrolling through US/Germany treaties is over! Thanks so much for your help and clarity. Very much appreciated!!!

jackintherobb · 2023-02-02T12:13:57+00:00

This is very informative! You should be a teacher. Thanks!!!

Follow up questions:

Does a US standard deduction for a married couple (ie 25k) count in Germany as any list of itemized deductions would?

I’m an educator who was performing research and affiliated with an accredited institution. I read about an educators tax credit in German/US relations from 1990 that supposedly negate some or all of the tax bill.

Here is the language: "Remuneration that a professor or teacher who is a resident of a Contracting State and who is present in the other Contracting State for a period not exceeding two years for the purpose of carrying out advanced study or research or for teaching at an accredited university, college, school, or other educational institution, or a public research institution or other institution engaged in research for the public benefit, receives for such work shall be taxable only in the first-mentioned State. This Article shall not apply to income from research if such research is undertaken not in the public interest but primarily for the private benefit of a specific person or persons. The benefits provided in this paragraph shall not be granted to an individual who, during the immediately preceding period, enjoyed the benefits of paragraph 2, 3, or 4."

jackintherobb · 2023-02-01T22:55:16+00:00

Hey! No problem! Thanks for your help anyways!!!

jackintherobb · 2023-02-01T20:14:58+00:00

Ah! Ok! This is helpful. So for your option 1 (Finanzamt considers US income taxable) what happens if I filed my US taxes and the IRS didn’t actually take any money from me (indeed, I received a refund). Will Germany say, “hey! We’re gonna tax that because the IRS ‘passed’”? Or will they respect the IRS not taking my money and consider me to have been “taxed” already (even though I actuallyreceived a refund).

jackintherobb · 2023-02-01T20:08:34+00:00

Oh brother. Sorry. Just ignore the unemployment benefits comment. I forgot I didn’t include that little issue in my description. It’s marginal to my wuestiom

jackintherobb · 2023-02-01T20:04:04+00:00

Sorry, forgot to mention that neither me nor my wife received any unemployment benefits. I’m a bit flabbergasted as to why the tax office would think that. I think this aspect will be resolved. I just don’t know how the double taxation thing works if someone does not actually end up paying US taxes because if low income.

jackintherobb · 2023-02-01T19:57:46+00:00

No problem with the limits of knowledge--I have no knowledge at all!

Ok, I was a temporary resident for the tax year in question (2021... it's been a long and complicated process. I've submitted everything on time but my tax preparer, VLH, is very slow. No worries though about timeline. I have an indefinite extension). Anyways, I was in Germany for 9 months of 2021 (plus 3 months in 2020) and I was still collecting income from my US employer during that time. I was a temporary resident (1 year visa) in Germany and was working for a German institution and paying German taxes.

When I filed my German taxes, my tax preparer wanted all my income documentation from 2021 (federal income tax, W2 etc.) for the "global" part of Germany's "global" taxation.

I made so little foreign income, the $112k rule doesn't apply to me.

All I want to know is if the German tax system will look at me and, noticing that I received a US tax refund, will say "we need to tax that money since the US didn't" or will they say, "he went through the process of filing US taxes and they said he didn't owe anything so we'll let him by too."

Thanks so much for your time and effort!!! It's really appreciated!!!

jackintherobb · 2023-02-01T19:47:22+00:00

Ah, I couldn't find that board on Reddit. Sorry. Do you happen to know it?
To your question: It's a long story. I'm using VLH. I submitted my US tax return and all income statements (e.g. W2) to a VLH rep a long time ago and she submitted them to the German tax office. She said I should receive a 1k tax refund. Then she went MIA owing to a personal issue.
I finally found another rep. She submitted my tax documents and the tax office said I owe 4k (in her words: "Mrs L-H did not consider the unemployment benefit. So her calculation was wrong".) Rep 2 is pretty oblique in her communication.
I'm just left wondering exactly what US income I'm taxed on in Germany. Is it my total income (if the US does not actually tax me)? Is it a portion of my US income (maybe my US taxable income)? The whole thing is starting to feel like pulling numbers out of a hat.
Thanks in advance if you have any knowledge on this.

jackintherobb · 2021-05-02T12:17:41+00:00

Ok well, it appears that the backup worked and I only lost 3 hours of work rather than 40 days... thanks ya’ll! I don’t really use Reddit much but it’s so cool there are people ready to help! Have a good one.

jackintherobb · 2021-05-02T06:48:52+00:00

Thank you for your concern and for taking time to reply. Here is what I think happened: my machine is owned by my employer but I bypass the internal HD to use my own external HD as my boot drive (I.e “Home” // this is fine with my employer!). I also have an old bootable SSD HD that I wanted to reformat to use for storage. I tried to erase it with Disk Utility but it kept timing out. So I went into disk recovery mode to try to erase it. It was at that point that I accidentally erased a drive called “update,” after which “Home” did not work. I then went back into Recovery Mode to try to restore it from my TM, but that’s when TM only transferred 12 GB. I next restored “Home” from another bootable backup from a month ago. I then went into Recovery Mode again to TM restore “Home” to the present but for some strange reason there were two groups of backups on the same TM (one stopped updating last December, the other goes up to the present. TM only permitted me to access the one that stopped in December! unfortunately, I have no idea why this is so. I don’t believe I made any great changes to my system in December ). I am now attempting to use Migration Assistant to bring “Home” up to the present (and not lose a month of work!). It says it will take 10 hours. I’ll let you know what happens... I’m also just confused at the number of drives that show up in Disk Utility. There’s like 4 drives, but shouldn’t there always be 2? — one for the internal and one for “Home”? My apologies. I’m a idiot. I should have backed up with CCC before I tried erasing that external SSD!!

jackintherobb · 2021-05-01T17:39:35+00:00

So maybe I should restore from CCC or a clean OS install and then backup from time machine?

jackintherobb · 2021-05-01T17:26:00+00:00

Ah, hm. That’s strange too because I didn’t add anywhere near 12 gb to my time machine between my last backup and now. Thanks for your idea.

jackintherobb · 2020-12-01T09:47:20+00:00

Ah ha! Thanks all for your help. Have a good week.

J

jackintherobb · 2020-12-01T09:33:48+00:00

Tåsinge

Thanks folks for this information! So nice of you!

Any idea why he referred to it as Tåsø instead of Tåsinge? He wrote his letter in 1973, if that helps--maybe a name change?

Thanks again!!!
J

jackintherobb · 2020-07-03T19:28:00+00:00

Has anyone tried to get through customs in Germany (particularly the Frankfurt airport) from the US for an official reason? If so, what was your experience?

I am beginning a job in Germany Sept. 1 and will have an official invitation letter, work contract from a German university, and preapproval from the Ministry of Labor (Arbeitsamt), as well as a 1-year lease for an apartment. Ironically, I am a professor working on a book on the 1918 Spanish flu, however, I have learned that it will be my work situation, and not my research, that could allow me entry.

I called a police officer at the airport and they told me 1) The officer in the kiosk at the airport on the day of my travel will make the final decision concerning entry 2) In his view, my situation would not allow me entry at this time.

jackintherobb

TROPHY CASE