So, I recently got a job in Germany (yay!) and I'll be shipping out in a few months. Leading up to this, I've been doing research to figure out what all I need to do to make sure everything here in the states is accounted for. After some research I found out the United States is 1 of 2 countries on the entire planet, where citizens are required to, at the very least, file taxes and pay, even on income earned in a foreign country at a non-american company. not yay.
After even more research, I came across the Foreign Earned Income Exclusion, which allows you to exclude up to ~$108k if you meet certain criteria. Problem is, the criteria is super vague (for no good reason) and no one seems to have a good explanation. Some people say US debt can screw you. Or leaving your new country of residence can screw you. Stuff like that. I'm mostly worried about all this, so that I don't screw myself out of being able to renew my passport come 2025.
Disclaimer: I do plan to speak with a CPA, but I would love some information before I go and talk to one, to at the very least guide the conversation. I'll also reach out to my contact overseas as well to see if they can point me in the right direction
So here is my situation:
The Job
- German company, on German soil, has branch offices in other countries
- 58,000€ per annum gross salary, 33,640€ net
- the contract term is indefinite and I plan on staying for a good long while
- I will be moving and beginning work in April (visa willing)
My debt situation
- I have a car loan, ~$7,000 left to pay on it. The car is only worth about $6k
- I have ~$3,400 in credit card debt that needs to be paid off. This is priority 1 when I land on my feet
- I have ~$29,300 in student loan debt.
- I currently pay $200 a month on this.
- Once I've started my new job, I plan to slowly ratchet this up to ~$500 a month, as I'll be living in a 2 income household (see below).
- I have a credit card with a paid balance each month. I use it for housing and food, which comes out to around $2k total a month. This will most likely be going away as I won't be a resident of the United States anymore.
In total I have about ~$40k in debt, which feels like a lot, but most of it is wrapped up in student loans.
Housing situation overseas
- My company is applying for a resident work visa for me, this entitles me to live and work in Germany
- I will eventually apply for the EU Blue Card, but that won't be till 2021 at the earliest.
- I will be living with my girlfriend (who I plan to marry) who is German
- I do plan to come back to the states to visit from time to time, but not more than the allowed 35 days
- I also plan travel in and around Germany
Okay, so, does anything in my situation (at the moment) look like it would deny me from being able to claim the FEIE? If I'm not mistaken, my new tax home would be 100% Germany, at least for the prorated portion of the FEIE. As well, I should be well on my way to being considered a bona fide resident, assuming I stay in the EU for all of 2020.
Does the fact that I may still have a car loan when I move exempt me from claiming the FEIE? Does any of my other debt do the same?
So, TL;DR:
- Got a job in germany
- Looked into the FEIE
- Freaked out because I'm getting conflicting information
Any advice or guidance or recommendations or reading would be appreciated
Submitted February 15, 2019 at 05:14PM by notAnotherJSDev http://bit.ly/2N6WamM
