Tax system in the USA for emigrants
Tax liability in the USA
In the USA, US citizens, green card holders and people who live in the USA for at least 183 days a year are liable for tax. Taxes are levied on worldwide income. Tax returns must be filed annually by April 15 using Form 1040.
Green Card Holder and tax liability
Green card holders who live permanently in the USA must file a US federal income tax return (Federal Form 1040). Exceptions apply if their green card status has been revoked or surrendered, their worldwide income does not exceed certain limits or they are considered non-residents of the USA under a double taxation treaty.
For example, green card holders who are unmarried and under the age of 65 do not have to file a tax return for the 2023 tax year if their income is less than USD 12,950.
Double taxation agreements (DTA)
The double taxation agreement between the USA and Germany applies to German green card holders whose main place of residence is in Germany. This agreement is intended to prevent income from being taxed twice. In the first year, a US Nonresident Alien Income Tax Return (Form 1040NR) and a copy of Form 8833 must be submitted.
Different types of tax in the USA
The USA levies various types of tax: federal, state and local. Income tax is progressive and varies from state to state. Other types of tax include the property tax on real estate, the Social Security tax, the Medicare tax, the sales tax on purchases and the excise tax on certain goods.
Income tax
Federal income tax in the US is progressive and ranges from 10% to 37% (as of 2023). Here are the tax brackets for 2023:
– 10% on income up to 10,275 US dollars (single persons) or 20,550 US dollars (married couples)
– 12% on income between 10,276 and 41,775 US dollars (single persons) or 20,551 and 83,550 US dollars (married couples)
– 22% on incomes between 41,776 and 89,075 US dollars (single persons) or 83,551 and 178,150 US dollars (married couples)
– 24% on incomes between 89,076 and 170,050 US dollars (single persons) or 178,151 and 340,100 US dollars (married couples)
– 32% on incomes between 170,051 and 215,950 US dollars (single persons) or 340,101 and 431,900 US dollars (married couples)
– 35% on income between 215,951 and 539,900 US dollars (single persons) or 431,901 and 647,850 US dollars (married couples)
– 37% on income over 539,900 US dollars (single persons) or 647,850 US dollars (married couples)
Property Tax
The property tax varies greatly depending on the state and can be between 0.2% and 2% of the property value.
Social Security und Medicare Tax
The Social Security tax is 6.2% for employees and 12.4% for the self-employed on income up to USD 147,000 (as at 2023). The Medicare tax is 1.45% for employees and 2.9% for the self-employed, with no income limit.
Sales Tax
The sales tax varies from state to state and can be between 0% and 10%.
Excise Tax
Excise taxes are levied on certain goods such as gasoline, tobacco and alcohol and also vary from state to state.
Reporting obligations for foreign bank accounts (FBAR)
Green card holders and US citizens must report foreign bank accounts if their total annual value exceeds 10,000 US dollars. This reporting obligation is known as the FBAR (Foreign Bank Account Report) and must be submitted by April 15 of the following year.
Deadline extensions and support
The submission of tax returns can be facilitated by software or tax preparation services. An extension of the deadline until October 15 is possible. If there are difficulties with payments, an installment payment can be requested. The IRS offers various support services and information for taxpayers.
Additional information for pensioners and persons with dual citizenship
Retirees and persons with dual citizenship must also file US tax returns if their income limits are exceeded. Income from abroad can be exempt or credited against US tax under certain conditions.
For a successful emigration to the USA and compliance with all tax obligations, we recommend that you obtain comprehensive information at an early stage and, if necessary, seek professional help.
Our USA relocation service includes the following services:
- Exportverpackung der Möbel
- Einpackarbeiten komplett
- Packmittelgestellung für Überseetransporte
- Möbel Demontagen
- Erstellung einer Ladeliste mit Nummer für jeden Gegenstand
- Komplette Zollabfertigung Export
- Containerbeladung bei Ihnen am Haus oder Vorholung zu unserem Lager - Situationsabhängig
- Transport von Haus/Lager bis Hafen
- Seefracht von Hafen bis Hafen
- Komplette Zollabfertigung Import
- Transport von Hafen bis Haus
- Auspacken der Möbel
- Möbelmontagen
- Entsorgen der Verpackungsmittel am Tag der Entladung
- Auspackarbeiten der Kartons auf Wunsch - wird gesondert nach Aufwand abgerechnet
- Terminalabfertigungsgebühren am Zielort
- Rückführung des leeren Containers zum Hafen/Terminal
Sie können eines unserer Rundum-Sorglos-Pakete für ein stressfreies Umziehen buchen oder einzelne Umzugsdienstleistungen in Anspruch nehmen. Ergänzend zu unseren bereits genannten Umzugsleistungen bieten wir Ihnen noch spezielle Service- und Zusatzleistungen für Umzüge jeglicher Art an. Fragen Sie uns einfach und wir finden schnell gemeinsam die optimale Lösung für jede noch so kleine oder große Umzugsherausforderung. Stellen Sie uns eine Anfrage und wir erstellen Ihnen ein individuelles Angebot.
Your relaxed move overseas
As a German company with over 120 years of experience, we know the special features that need to be considered when moving and ensure that your move goes quickly and smoothly.
Our moving company provides you with state-of-the-art equipment and high-quality packaging material to protect your valuables and furniture in the best possible way during transportation.
As one of the most successful moving companies in Germany, we offer you a first-class service at competitive prices. We understand that every move is unique and that's why we offer customized solutions tailored to your individual needs. Come and see us, Heinrich Koch Internationale Umzugs- und Archivlogistik GmbH, our movers and our services for for yourself - and you will soon be one of our many satisfied regular customers.
Arrange a visit with one of our customer advisors.
Arrange an appointment with one of our customer advisors. We will be happy to visit you and provide you with a detailed quote for your USA move that fits. If you need advice or have any questions, please contact us in Osnabrück on the following telephone number 0 541 – 121 68 50. We look forward to helping you!
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Your contact for international moves
Christian Braunschweig