Hi All,
I’m a German citizen living and working in the US for many years with a green card. I have some questions regarding taxes if, hypothetically, I would move back to Germany. While giving up the green card could be an option in future to make everything easier, I would not consider this at the moment. So that means I would have to file tax returns in the US (because of green card) and Germany (because of residency).
First question, in general, would I always have to declare everything on both returns? For example, let’s take capital gains in a US brokerage account. I would declare this on the US return as usual. But would I also need to do currency conversion and report the same capital gains on the German return? Or is there income that only needs to be reported on one side?
I assume everything always on both sides, which leads me to the next question about foreign tax credit. How would this work in practice? I would first do my German tax return to see what taxes I paid in which category. Then calculate the credit and apply it to my US return? Is there a formula how to calculate this? E.g. is this taxes before or after deductions? Before or after getting a tax refund/pay taxes?
Is this doable with TurboTax for US and Elster or similar in Germany? Is anybody doing this? :-D
Bonus question: Would I have to file a US state tax return, too? Do the same credits apply?
I’m a German citizen living and working in the US for many years with a green card. I have some questions regarding taxes if, hypothetically, I would move back to Germany. While giving up the green card could be an option in future to make everything easier, I would not consider this at the moment. So that means I would have to file tax returns in the US (because of green card) and Germany (because of residency).
First question, in general, would I always have to declare everything on both returns? For example, let’s take capital gains in a US brokerage account. I would declare this on the US return as usual. But would I also need to do currency conversion and report the same capital gains on the German return? Or is there income that only needs to be reported on one side?
I assume everything always on both sides, which leads me to the next question about foreign tax credit. How would this work in practice? I would first do my German tax return to see what taxes I paid in which category. Then calculate the credit and apply it to my US return? Is there a formula how to calculate this? E.g. is this taxes before or after deductions? Before or after getting a tax refund/pay taxes?
Is this doable with TurboTax for US and Elster or similar in Germany? Is anybody doing this? :-D
Bonus question: Would I have to file a US state tax return, too? Do the same credits apply?