Here are the two forms the tax office / Finanzamt on Mehringdamm told me I needed to fill out as a full-time employee without any other income:
The general tax information form
Anlage N
The general tax information form, 2008ESt1A, has 4 pages.
The Anlage N, 2008AnIN, is only 3 pages. And since I didn't have anything to write-off: no car, no business trips, no home office, no double households, I really just filled out half of the first page.
I found the Anlage N quite easy to fill out. To make things simple, Anlage N refers to specific lines on your tax statement / Lohnsteuerbescheinigung, which is the equivalent of the American W-2 form.
Showing posts with label tax. Show all posts
Showing posts with label tax. Show all posts
Saturday, May 30, 2009
Sunday, April 5, 2009
German Tax Vocabulary Glossary
Verdienstabrechnung = salary statement
Bruttogehalt = gross salary
Gesamtbrutto = gross total
Steuerbrutto, laufende Bezuege = gross tax / regular pay
Lohnsteuer aus monatlichen Bezuegen = monthly salary tax
Solidaritaetszuschlag = solidarity charges for rebuilding East Germany
Rentenversicherungsbrutto = gross pension insurance; amount of your salary that is used for the rest of the calculations related to your insurance
Rentenversicherung = pension insurance fund
Arbeitslosenversicherung = unemployment insurance
Freiwillige Krankenversicherung = health insurance
Freiwillige Pflegeversicherung = longterm care insurance
Auszahlungsbetrag = what you put in your pocket
Anlage AUS = tax form for foreign income declaration
Anlage N = salary income in Germany
Saturday, April 4, 2009
German Tax Help
People have told me to go to the Finanzamt in my district and ask for help filling out all the forms. I only wish that ELSTER, the German e-filing site, was available in English.
But in case they don't help me, I plan to ask for help at two local tax help groups: the Lohnsteuer-Beratung Berlin or the Lohnsteuerhilfe Berlin-Brandenburg.
The Lohnsteuer-Beratung Berlin has online information in English and, according to Toytown's boards, has English-speaking tax preparers. The flat cost is 92.33 € a year and 12.67 € entrance fee for the first year, so the total for this year's tax return would be 105 €.
The Lohnsteuerhilfe Berlin-Brandenburg only has information in German on its website, but the cost seems to be on an attractively-priced sliding scale. Since I only worked in Germany since August, my 2008 taxable income is quite low, and the cost for me would be 56 euros + 8 euros for the entrance fee, so the total would be 64 euros...unless they include the money I made in the US for 2008...
After my visit to the Finanzamt, I will first try ELSTER with an online translation tool before asking for professional help.
But in case they don't help me, I plan to ask for help at two local tax help groups: the Lohnsteuer-Beratung Berlin or the Lohnsteuerhilfe Berlin-Brandenburg.
The Lohnsteuer-Beratung Berlin has online information in English and, according to Toytown's boards, has English-speaking tax preparers. The flat cost is 92.33 € a year and 12.67 € entrance fee for the first year, so the total for this year's tax return would be 105 €.
The Lohnsteuerhilfe Berlin-Brandenburg only has information in German on its website, but the cost seems to be on an attractively-priced sliding scale. Since I only worked in Germany since August, my 2008 taxable income is quite low, and the cost for me would be 56 euros + 8 euros for the entrance fee, so the total would be 64 euros...unless they include the money I made in the US for 2008...
After my visit to the Finanzamt, I will first try ELSTER with an online translation tool before asking for professional help.
American Taxes Filed!
Hooray!
Today I finally filed my taxes after two weeks of research and playing around with Turbo Tax. After this, I feel like I could be a tax preparer!
In my personal case, filing the the foreign tax credit, Form 1116, would have given me a tax liablity, whereas filing the foreign income exclusion, Form 2555, I got a small refund. So try it both ways! Even though the general wisdom I have seen is that the foreign income exclusion usually lessens your tax liability than the foreign tax credit.
I found a great great article from a professional tax expert about the Foreign Tax Credit. He explains the form in simple terms, using an example to fill it out. The site on which I found it is ACA, American Citizens Abroad, and they have a host of practical articles on taxes and other bureaucracy.
Now I just have to prepare my German taxes!
Today I finally filed my taxes after two weeks of research and playing around with Turbo Tax. After this, I feel like I could be a tax preparer!
In my personal case, filing the the foreign tax credit, Form 1116, would have given me a tax liablity, whereas filing the foreign income exclusion, Form 2555, I got a small refund. So try it both ways! Even though the general wisdom I have seen is that the foreign income exclusion usually lessens your tax liability than the foreign tax credit.
I found a great great article from a professional tax expert about the Foreign Tax Credit. He explains the form in simple terms, using an example to fill it out. The site on which I found it is ACA, American Citizens Abroad, and they have a host of practical articles on taxes and other bureaucracy.
Now I just have to prepare my German taxes!
Monday, February 9, 2009
More Findings on American Taxes
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!
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!
German Taxes
Now that I am organizing my American tax papers, I briefly researched German taxes.
Once an employee has worked or lived in Germany for more than six months, they are considered a resident for tax purposes. But I wonder if this means for the tax year or year-to-date. For example, I moved to Germany in August, so for tax year 2008, I was not a resident in Germany. But in a matter of days is my six-month anniversary of living in Germany.
One can get tax forms from the Finanzamt or get them sent to your work (!?). The easiest way would be to file online via Elster, which has information in English, videos, and a hotline. Unfortunately, the hotline is ,14 centimes a minute.
If you have deductions, you file also an Anlage N. Apparently, if you contribute to social security in your home country, you can deduct this so that you are not paying twice the amount of 'social' taxes.
After you file, you will receive a notification whether you owe more taxes or get a refund. In German, this is a Bescheid über Einkommensteuer.
The deadline for filing the 2008 German tax return is May 31, 2009.
Speaking about taxes, if one leaves Germany permanently before living here for five years, you may get your contribution to the German pension system back. You must wait until you have lived two years away from the EU to claim reimbursement.
Once an employee has worked or lived in Germany for more than six months, they are considered a resident for tax purposes. But I wonder if this means for the tax year or year-to-date. For example, I moved to Germany in August, so for tax year 2008, I was not a resident in Germany. But in a matter of days is my six-month anniversary of living in Germany.
One can get tax forms from the Finanzamt or get them sent to your work (!?). The easiest way would be to file online via Elster, which has information in English, videos, and a hotline. Unfortunately, the hotline is ,14 centimes a minute.
If you have deductions, you file also an Anlage N. Apparently, if you contribute to social security in your home country, you can deduct this so that you are not paying twice the amount of 'social' taxes.
After you file, you will receive a notification whether you owe more taxes or get a refund. In German, this is a Bescheid über Einkommensteuer.
The deadline for filing the 2008 German tax return is May 31, 2009.
Speaking about taxes, if one leaves Germany permanently before living here for five years, you may get your contribution to the German pension system back. You must wait until you have lived two years away from the EU to claim reimbursement.
Wednesday, February 4, 2009
Paying American Taxes from Germany
It is almost tax filing time for 2008.
Unfortunately, I cannot file IRS Form 2555 for Foreign Earned Income Exclusion because I did not spend 330 days in Germany last year. If I were able to file this, only anything above $80,000 will be taxable. This will be taxed as ordinary income.
I may get to deduct all the costs necessary to maintain a residence abroad for work purposes. Not sure if I can do this even if I cannot file Form 2555.
No matter what, I get to file Foreign Tax Credit From 1116 for taxes already paid in Germany.
If I had any bank accounts with more than $10,000 at any time outside of the US, I have to file the Treasury Department From TDF 90-22.1, Report of Foreign Bank and Financial Accounts.
Since I moved this year, I should file Form 3903 for Moving Expenses. I have to use a separate form for each move to report transportation, storage, travel, lodgings, and more. I cannot deduct moving expenses reimbursed by an employer.
Since the Foreign Earned Income Exclusion only apply to federal taxes, this month I will register to vote in Texas, renew my driver's license in Texas, and open a checking and savings account in Texas so that my legal domicile is Texas, where there are no state taxes.
Fortunately (or unfortunately), I did not convert my 401k rollover into my Roth IRA in 2008. Otherwise, I would have had to file IRS Form 8606 to pay taxes for my Roth IRA conversion. I would have been taxed on my contribution and earnings as ordinary income.
I will do it in 2009, because this will be a low tax year for me. And I will try to max out at the 15% tax bracket.
Should I get an accountant? Or go TurboTax?
Unfortunately, I cannot file IRS Form 2555 for Foreign Earned Income Exclusion because I did not spend 330 days in Germany last year. If I were able to file this, only anything above $80,000 will be taxable. This will be taxed as ordinary income.
I may get to deduct all the costs necessary to maintain a residence abroad for work purposes. Not sure if I can do this even if I cannot file Form 2555.
No matter what, I get to file Foreign Tax Credit From 1116 for taxes already paid in Germany.
If I had any bank accounts with more than $10,000 at any time outside of the US, I have to file the Treasury Department From TDF 90-22.1, Report of Foreign Bank and Financial Accounts.
Since I moved this year, I should file Form 3903 for Moving Expenses. I have to use a separate form for each move to report transportation, storage, travel, lodgings, and more. I cannot deduct moving expenses reimbursed by an employer.
Since the Foreign Earned Income Exclusion only apply to federal taxes, this month I will register to vote in Texas, renew my driver's license in Texas, and open a checking and savings account in Texas so that my legal domicile is Texas, where there are no state taxes.
Fortunately (or unfortunately), I did not convert my 401k rollover into my Roth IRA in 2008. Otherwise, I would have had to file IRS Form 8606 to pay taxes for my Roth IRA conversion. I would have been taxed on my contribution and earnings as ordinary income.
I will do it in 2009, because this will be a low tax year for me. And I will try to max out at the 15% tax bracket.
Should I get an accountant? Or go TurboTax?
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