American Tax for US Residents Living Switzerland

American tax for US residents living Switzerland is generally the same whether you are in the United States or abroad. Your worldwide income is subject to US income tax, regardless of where you reside.

American Citizen or Green Card Holders Living in Switzerland

The requirement to file U.S. taxes for all U.S. citizens and Green Card holder living in Switzerland or abroad is the same and are subject to declare their worldwide income. The difference is the taxpayers living abroad can use Foreign Income Exclusion to exclude or reduce the taxable income or Foreign Tax Credits to get credits paid abroad and avoid double taxation.

Switzerland is offered referred to as the heart of Europe with what are reasonable salaries and a lot of free time to enjoy the perks which give us one of the few reasons for US citizens and Green Card holders to move. Per The Local ch, Zurich is the world’s second-best city for expats. 

One of the biggest factors overlooked by the US citizens and Green Card holders are filing their US returns in spite of paying the Swiss tax, Canton Tax, City tax. As a US person, you are required to report your worldwide income. Read Taxes for US citizens living in Switzerland.

The good news for all the tax payers Americans living in Switzerland, is they have calendar year reporting just like the US. Luckily, there are various exclusions and exemptions available to prevent double taxation. 

Americans living abroad have special provisions that help them to save double taxation:

1. Foreign earned income exclusion, that allows the expats to reduce the taxable income for the year 2019 by first $105,900 earned as the result of labor while a resident of a foreign country
2. Foreign tax credit; allows in reducing the tax bill on remaining income by a certain amount paid to a foreign government.
3. Foreign Housing Exclusion– This allows for an additional exclusion from income for certain amounts paid for household expenses occurring from living abroad.

• US and Switzerland governments have a Totalization Agreement which avoids contributing to Social Security and Medicare to both countries. There is a https://www.ssa.gov/international/CoC_link.html that needs to filed: opts.ssa.gov.
• There is a Bilateral Agreement under which under which all Swiss financial institutions have to report the IRS the value of accounts for all US citizens and green cardholders. The form 114 or F BAR is reporting all your foreign financial accounts if the aggregate value of these accounts is $1000, or more. If you have foreign assets worth a minimum of US$200,000 (per person), excluding your home if it is owned in your own name, you should also file form 8938 to declare them.

It is advisable to take the guidance and advice of highly trained experts, who have helped many Americans in filing their US expat taxes in Switzerland thus table best tax strategies.