Author Topic: Foreign tax credit - Germany taxes  (Read 1107 times)


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Foreign tax credit - Germany taxes
« on: January 18, 2022, 07:31:17 AM »
Does anyone have a good calculator for planning purposes. We are likely to move to Germany. We will exceed the amount of income allowed by the foreign tax credit but will only have one household income. Its hard to figure out what our tax liability might be and how our housing expenses and education/tuition expenses will affect that. So, if anyone has a good calculator (I could not not find one) that might help with an expat moving to a higher taxed country. Thanks in advance.


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Re: Foreign tax credit - Germany taxes
« Reply #1 on: January 18, 2022, 09:40:33 AM »
I would hire a tax person that focuses on expat taxes and has experience with German residency. These things are highly nuanced.

Things that are not taxed in the US (your 401k, IRAs) may be taxed in Germany. Is there a tax treaty between the 2 countries that decides which social security system you pay into? Etc...

Most likely you will have a $0 US tax liability - getting a credit for any tax paid in Germany.

You can't exceed the income allowed by the foreign tax credit (you can exceed the Foreign Earned Income Exclusion amount.)
Any excess can be carried forward and applied to future US tax bills, assuming you return to the US within 10 years.