I have been living in Switzerland for 4 months on a B permit, prior to that i was working in the US. So i have a w-2 Form from my US employer for most of 2009. But i received income in Basel from September onwards. I haven't got a clue how to file my taxes in the US. I dont want to end up owing when really i should be getting a return. I am filing as single. Does anyone have any advice on how to proceed? Any help is appreciated.
Please go easy on me if there is a thread (or more than one) out there on this topic already, but i did search and have not found the info i need.
You have until 15.06.2010 to file your US return. I would just use
Turbotax unless you own your own business. There are several
threads on US taxes on here.
Right. I used Turbotax at home but without a W-2 form how do i calim my income from Switzerland? I don't see anything regarding that aspect of it in the forum. (I dont own my own business)
You create your own W-2 form in the software, and it will include this with your US income.
The details are given in IRS publication 54 - Tax Guide for U.S. Citizens and Resident Aliens Abroad .
Lots of info here: http://france.usembassy.gov/irs.html , including exchange rates and telephone numbers for help.
Actually, I'd use tax act rather than turbo tax. Tax act seems to deal with the foreign income stuff a lot easier, IMHO. And if you have to buy the software, you can actually pay for it with a foreign credit card.
www.taxact .com
I used TurboTax for years back home in the US, but it's just too difficult once you move overseas. There are a slew of tax laws associated with living overseas and declaring your global income in the US. If you'd like the contact information for a good accountant back home send me a note. He's quite reasonable and will get the best results for you.
Actually, you don't need turbo tax, you need form 2555 or 2555-EZ (depending on how complicated your situation is-most of us with normal jobs can use 2555-EZ). You also don't need to generate a W2 form, you can write in your foreign income on form 1040 and then deduct it again (up to a limit-the instructions for all of this are with form 2555 or 2555-EZ). They do ask you to convert your Swiss income to US Dollars, so a conversion can be found on some US govt. web sites, ie. http://fms.treas.gov/intn.html#rates .
Also, for your state taxes, don't forget that you'll need a non-resident/part-year form.
Unless you're an accountant or have hours and hours to spend with this, highly suggest an accountant.
Actually, that's not always true.
The first year you are abroad, you may have to file form 2350 (application for extension of time to file US income tax return) BEFORE April 15, because you may not meet the criteria for a tax home in Switzerland by the automatic extension time of June 15th (you must be in Switzerland for 330 days during any period of 12 consecutive months). This is true for those of us who move late in the year5. If you must extend until after June 15th, you must ask for a special extension before April 15th (since you wouldn't qualify for the automatic extension on June 15th).
By the way, when you send in form 2350, don't expect any feedback from the IRS, but you can call them and they'll tell you if they've received the form. They're actually surprisingly nice about these things.
Or, if you're a relatively poor person-no crazy investments, a paycheck, you know, simple, then the whole thing takes about 30-45 minutes the first time. After that, maybe 15 minutes top. Besides, we can't all afford accountants!
Yes, it's very important to make sure you qualify for the foreign earned income exclusion by satisfying the 330 days or one uninterrupted tax year rule. Otherwise your entire swiss income will be subject to the full US tax amount (minus a credit for what you pay to the swiss gvt) (i'm a US tax lawyer just to clarify)
Thanks everyone! This was really helpful
It seems i am too dumb to file the US tax return
me too hence why I dont bother sending them in
/$0 income
There is the bottom portion of the form, which the IRS will send back to you, to indicate whether your Form 2350 extension will be approved. Attach this to the return when you file it to the IRS.
Remember that this only extends the time to FILE, and never extends the time to PAY, so if you expect to owe Uncle Sam, you can make an extension payment with the Form 2350 itself by April 15.
Here is my theory, can you tell me if I'm correct?
If I take the foreign earned income exclusion, I lose the ability for tax credit on this excluded income. If my swiss taxes are higher than expected US taxes, I'm loosing...
If I'm going to take the tax credit, I don't need to worry about 330 days.
Also, do you know what parts of the withholding here is considered tax? Is the social security equivalent here is a tax?
If your Swiss taxes are higher than your American taxes, it is better
to take the tax credit.
Only income taxes are important to US gov. I.e. payments for
social security cannot be included in your tax credits.
Right, if you don't care about the foreign income exclusion (FIE), then there's no need to satisfy the 330 day rule.
You are also correct to say that amounts excluded under the FIE don't qualify for the foreign tax credit.
If your Swiss taxes are higher than your US taxes, then you won't have to pay the US anything because your credit will be larger than your US tax burden (but from what I understand US taxes are almost always higher than Swiss taxes). You have excess credits in this situation and I believe you can actually carry these credits back or forward to other years in which you may have paid (or will pay) more US taxes than Swiss taxes.
I'm not too sure about what exactly is considered a Swiss tax, but I'll go with what holliday just said.