Even if I qualified for the Foreign Earned Income Exclusion, my investment income would not be excluded. I have to report income, earned or through investment, made anywhere in the world. If my investment income is greater than $1500, then I need to file Schedule B.
If the German tax I pay is more than the American tax I should have paid, then that excess could be credited back against my American tax payment (for example, when I move back to the States).
If I were single and had gross income of less than $8200, then I am not required to file, no matter where I lived.
Unfortunately, I make a bit more than that. So I should file the 1040, then claim a credit / deduction for my German income tax paid via the foreign tax credit form. I think.
To get more clarity, I ordered Publication 54, Tax Guide for US Citizens and Resident Aliens Abroad, from the IRS. Free delivery to Germany!
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