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Frequently asked questions




Who has to file a US tax return?

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 USA and the types of income received. No distinction is made between taxpayers who live in the United States and those who live outside the United States. For 2019, unmarried employees under 65 are required to file a US income tax return for annual wages of US$ 12,200 or more. However, if a taxpayer has income from self-employment, the obligation to file a tax return exists if the profit was US$ 400 or more. 

By when must the 2019 US tax return be filed?

By law, the due date for filing the 2019 U.S. tax return is April 15, 2020 for those residing in the United States on that date and June 15, 2020 for people living abroad. However, due to the Covid 19 issue, the US tax authorities have generally postponed the submission and payment deadline to July 15, 2020. If you need more time, you can extend the deadline to October 15, 2020 by submitting form 4868 before July 15, 2020 and, if necessary and with justification, until December 15, 2020. However, since the late interest will accrue from July 15, 2020, an extension payment in the amount of expected tax should be made by July 15, 2020. 

Is there a double taxation agreement?

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”.

What's an FBAR?

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.

Who must submit the FBAR form?

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.

When must the 2019 FBAR be submitted?

In principle, the deadline for submitting the 2019 FBAR is April 15, 2020. However, the IRS grants an automatic deadline extension until October 15, 2020. No extension application is required for this.

Who will receive the US $ 1,200 Payment / Economic Impact Payment stimulus?

The USA wants to stimulate the economy in the face of the Covid crisis and has therefore introduced the Economic Impact Payment Program. Eligible US taxpayers will receive the full amount of US $ 1,200 for themselves and US $ 500 for each US child who is declared as a dependent, up to a certain income.

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