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Posted by ben.a.bowen on March 5, 2008, 9:45 am
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Hi, all. I've searched through the thread and can't find anything that
matches this.
I moved to Switzerland from Texas on July 1. I have taken a permanent
position in Zürich and do not plan on moving back to the US any time
soon. I do not plan on giving up my citizenship. As far a I know, I do
not count as a bona fide foreign resident yet as I have not been here
a full year. I paid US taxes through June. I have been paying Swiss
taxes since July 1. Am I able to deduct the Swiss taxes from my US
taxes? Or will I be doubly taxed on those 6 months? Everything I've
read speaks of "bona fide" and "presence", but I can't seem to find an
answer to this.
I'm hoping I don't. Thanks for the advice.
Ben..
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Posted by L K Williams on March 5, 2008, 12:00 pm
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On Wed, 5 Mar 2008 09:45:28 EST, ben.a.bowen@gmail.com wrote:
>Hi, all. I've searched through the thread and can't find anything that
>matches this.
>
>I moved to Switzerland from Texas on July 1. I have taken a permanent
>position in Zürich and do not plan on moving back to the US any time
>soon. I do not plan on giving up my citizenship. As far a I know, I do
>not count as a bona fide foreign resident yet as I have not been here
>a full year. I paid US taxes through June. I have been paying Swiss
>taxes since July 1. Am I able to deduct the Swiss taxes from my US
>taxes? Or will I be doubly taxed on those 6 months? Everything I've
>read speaks of "bona fide" and "presence", but I can't seem to find an
>answer to this.
>
>I'm hoping I don't. Thanks for the advice.
>
>Ben..
To qualify under the bona fide residence rule, you must be a resident
for a period that includes one full tax year. In your case, having
taken up residence in July 2007, you will not be able to meet this
requirement until January 2009!
If you will meet the physical presence rule (330 days out of a
12-month period) you can take the exclusion AFTER you actually have
been outside the US for the requisite period of time. If you use this
rule, you cannot file until you do meet the requirements. File before
and the IRS will disallow the exclusion.
In your case, it appears the 12-month period begins on June 1, 2007,
assuming you do not return to the US anytime during the year.
If, for any reason, you do not qualify for the exclusion or your
income exceeds the allowable exclusion, you may claim a credit for
Swiss income taxes paid. Only that portion of the Swiss tax that
applies to the non-excluded income is allowable, however.
As you seem to have discovered, the seemingly simple rules are not
really so simple. I strongly suggest that you seek professional help
from some one who is familiar with the expat rules. Not just any CPA
or EA but some one who has experience working with expats.
Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by s_pickle2001 on March 5, 2008, 5:08 pm
Please log in for more thread options On Mar 5, 2:45 pm, ben.a.bo...@gmail.com wrote:
> Hi, all. I've searched through the thread and can't find anything that
> matches this.
>
> I moved to Switzerland from Texas on July 1. I have taken a permanent
> position in Zürich and do not plan on moving back to the US any time
> soon. I do not plan on giving up my citizenship. As far a I know, I do
> not count as a bona fide foreign resident yet as I have not been here
> a full year. I paid US taxes through June. I have been paying Swiss
> taxes since July 1. Am I able to deduct the Swiss taxes from my US
> taxes? Or will I be doubly taxed on those 6 months? Everything I've
> read speaks of "bona fide" and "presence", but I can't seem to find an
> answer to this.
>
> I'm hoping I don't. Thanks for the advice.
You won't be double taxed.
You have two choices.
1. File now without claiming the foreign earned income exclusion, but
you can always claim the foreign tax credit. Then once you have been
in Switzerland for a year, file an amended return claiming the
foreign earned income exemption,
2. File for an extension, and once file your tax return once you have
lived in Switzerland for a year. You need to calculate or at least
estimate how much tax you will owe and pay it by the due date, but the
chances are that too much has been withheld from you. I believe that
you can get longer extensions as well if you want to claim the foreign
earned income exclusion but the standard 4 months one should cover
you.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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