Steffen Loch

Every U.S. citizen and holder of a green card is generally required to declare their annual (worldwide) income in the U.S. and to file a U.S. income tax return (Form 1040) if the income is above the standard deduction amount. The standard deduction amount depends on the marital status (filing status) in the US. No distinction is made between taxpayers who live in the United States and those who live outside the United States. In 2020, unmarried employees under 65 are required to submit a US income tax return for annual wages of US $ 12,400 or more. However, if income from self-employment is generated, the obligation to declare exists from an annual profit of US $ 400.

The due date for filing the 2020 U.S. tax return is May 15, 2021 for those residing in the United States on that date and June 15, 2021 for taxpayers living abroad.  If you need more time, you can extend the deadline to 15 October 2021 by submitting form 4868 before the due date mentioned above. 

Yes, the United States has an agreement to avoid double taxation with numerous countries, including Germany, Austria and Switzerland. However, these agreements are only applicable to US taxpayers to a very limited extent. This is because the US generally excludes the application of these agreements for US citizens and tax residents and only allows them for a few articles (e.g. for the taxation of social security payments). This exclusion is anchored as a “savings clause” in the protocols or directly in the agreements. However, there are already regulations in accordance with the US tax laws that eliminate double taxation, e.g. by means of the “Foreign Earned Income Exclusion” or the “Foreign Tax Credit”.

FBAR is shortcut for “Report of Foreign Bank and Financial Accounts”. If you have foreign (non-US) bank accounts, securities accounts, life insurance policies or have authority to sign over such accounts, you may need to submit an FBAR form (FinCEN Form 114) to the U.S. annually. The FBAR form is not part of the U.S. tax return, but must be submitted to the Treasury Department separately each year. Since July 1, 2013, transmission has only been possible electronically.

All U.S. persons (in particular U.S. citizens and holders of a green card) are required to report their foreign bank accounts, securities accounts, power of attorney accounts, and life insurance policies if the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year reported. All non-American accounts and life insurance policies that belong to you alone or jointly and also accounts over which you have authority to sign  on the basis of a power of attorney must be specified. Accounts under US $ 10,000 need to be reported as well, there is no lower limit here. For each of the accounts and custody accounts, the respective highest level of the year must be stated.  The fact that there are double counts for transfers between accounts is inherent in the system and does not lead to any disadvantages, since the values ​​are not used for taxation purposes. Failure to submit the FBAR can result in severe penalties in the United States from $ 10,000 per year for non-deliberate non-filing to 50% of the maximum account balance per year for deliberate non-filing.