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Hey OP there might be a double taxation clause you can invoke per the U.S.-German tax treaty, check this out: https://www.cpasforexpats.com/post/us-german-tax-treaty-guide
my guy...
US citizens are obligated to enter the US on their US passport. They are also obligated to file taxes regardless of where they live. As a US citizen, you could be living on Mars for your whole life and still have to file US taxes.
You also have what, 6 years of back taxes to file? You should find a CPA with knowledge us US/German tax laws to prepare that for you. There may be treaties in place.
As someone else said, there's also the selective service you were supposed to have registered for
I pay taxes in Germany, I earn about 40.000 € a year. So I don't know.
I tried the IRS homepage but my english isn't good enough to file taxes. I don't understand much.
I am 35 years old and the lady that gave me my american passport tried to explain to me that I don't have to sign up for selective service anymore, I am too old lol. I didn't understand much of what she explained but she said: "it's fine don't sign up for it it's for young people" and sent me out of the embassy in munich.
Selective Service is "the draft". It's where the country can force you into military service.
You never filed for tax return in 18 years - in Germany? Mate, I get back about 1500-2000€ every year, do it.
I do taxes in germany and their is a tax partnership or something what I see. But I get about 700 € back a year too from germany.
The US gives you that money ever year 1re filling fro taxes to the US on your German income?
No, in Germany you pay taxes every month. At the end of the year you can do a text return where you ask for some of that back. Usually expenses that are work or kids related (traveling for work, job seeking, after school etc). Nothing to do with the US...
Op is asking about US taxes, not German
One other point, assuming you are male, you were supposed to register for the US Selective Service at the age of 18. There are potential serious consequences for not doing so.
You can contact them and explain your case. Or maybe you don’t need to now as you are past age 25. They are easy to contact and speak with.
Source - same situation with family member
I pay taxes in Germany, I earn about 40.000 € a year. So I don’t know.
I tried the IRS homepage but my english isn’t good enough to file taxes. I don’t understand much.
I am 35 years old and the lady that gave me my american passport tried to explain to me that I don’t have to sign up for selective service anymore, I am too old lol. I didn’t understand much of what she explained but she said: “it’s fine don’t sign up for it it’s for young people” and sent me out of the embassy in munich.
I work since I am 17 years old in germany and got the information that I am american citizen when I was about 32 (first time in america) I tried to enter with my german passport. The people at the airport told me I am american and need a passport. I didn't know until then.
If someone at a US consulate/embassy told you not to worry about the selective service because of your age, it’s probably fine.
Good luck sorting out your tax situation. My kids are dual US and Canada and haven’t had to pay any US taxes yet as there is a tax treaty between the two countries. It has been expensive for me to pay someone to file the US taxes though.
One of your questions I didn't see answered:
And after doing my research I found out americans file taxes every year. I haven't done it the last 18 years of working. Should I just not file?
You have two choices:
-
Full Disclosure : you tell the IRS, you haven't filled and ask them to help you rectify the situation. This could mean penalties and fines for filing late or based on your situation, they might let is slide (as it was an honest oversight). Once you've gone through this, then your back in the IRS' good graces (assuming you still file your taxes and fbar annually)
-
A "stealth" disclosure : (there's a better name but I forgot was it's called) basically, you just start to file your 2023 taxes and pretend that nothing has happened during the last 18 years... if you do this for the next 5 years (or 7 years?) and the IRS does not say anything, then you're back in the IRS good graces (they can only penalize you for x number of years) . But if the IRS decides to contact you, then they could throw the book at you (more than if you went with option 1).
Ultimately, it's a gamble with a risk. However, if you've recently learned of your citizenship and got a passport. I think it's quite plausible to get some lienency, both for the full disclosure and the stealth disclosure.
The IRS has a special procedure for this case called "streamlined procedure". Unfortunately it's a little complicated and you have to pay close attention to all the required details.
My english isn't good enough for that. I need someone to help me translate it.
In that case you should contact a professional who has done this thing before. But be aware, it's quite expensive. This site, for example, charges 749 €.
You should file your taxes every year. Since you don't work in the US, you'll only need to file federal. I don't think that having a US passport or not having one changes that. Filing should be relatively easy for most years if you use a service like FreeTaxUSA. As far as the previous years go, I'd consult with a professional.
I don't necessarily agree that you should renounce your citizenship. It might be true that you have no plans of moving there, but you can visit all you want with little hassle. If you ever decide to have kids, they may also appreciate the freedom that dual citizenship provides.
If you were born in the USA, lived in Germany your whole life, and only recently learned of your US citizenship, you need to seek legal advice from a German law firm or from the government. I suspect that getting your US passport was a huge mistake. You may want to contest the validity of your citizenship, as it doesn't sound like it offers you any benefits, and might actually be a financial liability.
OP read this, they're absolutely right - lawyer up!
Cause in the U. S. if you want to renounce your U. S. citizenship, you must settle your debts - which includes filing your U. S. Taxes.
... and yes, as a U. S. Citizen you need to file U. S. Taxes *even if you've never set foot in the U. S. *.
Note: there are double taxation laws between the U. S. and Germany, which prevent you from needing to pay taxes in U. S. (up to 100k / year or so), but you still must file them.
Also, as a U. S. Citizen, you'll need to file annually a FBAR with the IRS. This is basically a disclosure to the IRS that you have non-u.s. bank accounts (that exceed, in total, 20k usd / year).
The point being is that, in theory, there could be fines for not doing this, which (in theory) you would have to pay before being allowed to renounce your citizenship.
In practice, the IRS is pretty approachable - so you probably won't have an issue, but you'll definitely want decide if you want to keep the U. S. Citizenship (and the work associated with it: annual taxes and fbar) or renounce it.
The (only) upshot of filing U. S. taxes abroad if you have kids is that you qualify for a Child Tax Credit. Which amounts to 1000 usd / kid / year (I don't know if the kids need to have U. S. Citizenship or not)
Afaik your kids (under 18) are US citizens if you yourself are a citizen.
I don't disagree, but why would him getting a US passport matter? Either way, he would still be a US Citizen.
Because getting the passport and traveling with it makes it pretty official. If you've never held a passport, it could be easier to argue that the citizenship isn't valid at all, rather than having to go through the very expensive process of renouncing.
I don't see why that distinction matters. The US has documentation saying OP was born in the US. That alone is enough to say he's a citizen.
You're saying that it doesn't matter because the US government is able to prove his citizenship, but that isn't in question. The crux of this matter would be whether OP was ignorant of his citizenship and if that ignorance would have any relevance to his case.
Securing official documents only available to American citizens makes it more difficult to argue that he was ignorant of his status as an American citizen. He likely could still make a compelling argument (provided he acts quickly), but it does make it a bit more difficult.
Because the US taxes it citizens. Regardless where they live
(oversimplified)
You can be a US Citizen without a passport. That was half the point of OP's case lol
Sorry, was high and missed the point