I'm an IB senior examiner and a US citizen. I currently teach in Germany, and I have a question about places to have my examining fees deposited. If at all possible, I want to avoid being taxed on these examining fees. I know that I am exempt from US taxes, since the FATCA reporting threshold is $200,000 (correct me if I'm wrong about this). What I'm worried about is Germany. Will Germany tax me if the IB deposits money in my German bank account? If so, and I open an account in another European country (Liechtenstein for example), is there any way that my German bank would know about it?
Sorry if this is a bit of a dodgy question - I can always move it to the member forum but I thought I'd try here first. Thanks!
Tax question from an IB Examiner
Response
This is a perfectly acceptable dodgy inquiry for the public forum.
The FATCA threshold is indeed USD$200K assuming you live abroad, but this has nothing to do with US taxes or your tax liability; which depends on a number of tax treaties and whether you take the foreign income tax exemption, deduction or credit. Regardless of FACTA, on your individual US income tax return you must report any accounts (foreign or domestic) that are USD$10K or more.
Will Germany tax you on your income? Yes, it's income and you earned it while in Germany. Are you going to declare it, well thats up to you.
How would you access this other bank account? Youd either have to withdraw it directly using a bank card from that bank or transfer it (by wire or other means) to a bank you do have access too, which if its your German bank, then since they process the transaction they would know about it, but they wouldnt know its original source was income, which technically you didnt make in Germany at all you earned it in Liechtenstein (for example) and they wouldnt care, but Liechtenstein would probably want its tax cut out of it, and might wonder why you don't reside in their country but move coin across borders into Germany (or they could never care in this life or the next).
Honestly, the easiest way to launder your dirty IB coin is to open a new unaffiliated US account somewhere in your home state that you can open online, and wire (or ACH/Bill Pay) or withdraw from an international ATM in Germany your IB funds. The EU nations share more information about and amongst themselves than they do with Americans/Canadians/Australians, and since you are a US citizen its the easiest account to open. Germany doesn't care what a foreigner takes out of an overseas bank account and the US FINCEN doesn't care about a foreign withdrawal of a couple thousand, your bank would have lower limits than FINCEN would.
The FATCA threshold is indeed USD$200K assuming you live abroad, but this has nothing to do with US taxes or your tax liability; which depends on a number of tax treaties and whether you take the foreign income tax exemption, deduction or credit. Regardless of FACTA, on your individual US income tax return you must report any accounts (foreign or domestic) that are USD$10K or more.
Will Germany tax you on your income? Yes, it's income and you earned it while in Germany. Are you going to declare it, well thats up to you.
How would you access this other bank account? Youd either have to withdraw it directly using a bank card from that bank or transfer it (by wire or other means) to a bank you do have access too, which if its your German bank, then since they process the transaction they would know about it, but they wouldnt know its original source was income, which technically you didnt make in Germany at all you earned it in Liechtenstein (for example) and they wouldnt care, but Liechtenstein would probably want its tax cut out of it, and might wonder why you don't reside in their country but move coin across borders into Germany (or they could never care in this life or the next).
Honestly, the easiest way to launder your dirty IB coin is to open a new unaffiliated US account somewhere in your home state that you can open online, and wire (or ACH/Bill Pay) or withdraw from an international ATM in Germany your IB funds. The EU nations share more information about and amongst themselves than they do with Americans/Canadians/Australians, and since you are a US citizen its the easiest account to open. Germany doesn't care what a foreigner takes out of an overseas bank account and the US FINCEN doesn't care about a foreign withdrawal of a couple thousand, your bank would have lower limits than FINCEN would.
Re: Tax question from an IB Examiner
^Thank you. The amount of money is probably between $15k - 20k. I just want to make sure I don't get taxed on it if I report it to the IRS.
The IRS website on FATCA states the following:
''If you are single or file separately from your spouse, you must submit a Form 8938 if you have more than $200,000 of specified foreign financial assets at the end of the year and you live abroad''
But from my understanding, I still have to file taxes in the US and claim the moneys earned from the IB. Surely the IRS would tax those earnings? Or am I exempt because I live abroad?
The IRS website on FATCA states the following:
''If you are single or file separately from your spouse, you must submit a Form 8938 if you have more than $200,000 of specified foreign financial assets at the end of the year and you live abroad''
But from my understanding, I still have to file taxes in the US and claim the moneys earned from the IB. Surely the IRS would tax those earnings? Or am I exempt because I live abroad?
Reply
@durianfan
Thats a lot of scripts to make even USD$15k in IB coin. Well youd be overseas and would be able to include it in your total tax credit which is currently USD$101,300, so if your income from your German IS is over USD$80K and/or your IB coin is over USD$20K, then you are looking at some potential tax.
Those are absolutely true sources, but FBAR (Foreign Bank and Assets Reporting) requires you to declare any and all accounts over USD$10K
"Taxpayers with an interest in, or signature or other authority over, foreign financial accounts whose aggregate value exceeded $10,000 at any time"
http://www.irs.gov/uac/newsroom/irs-rem ... tions-2015
Surely the US would, but so would Germany and any other EU tax authority. Of those the US is the most generous.
Thats a lot of scripts to make even USD$15k in IB coin. Well youd be overseas and would be able to include it in your total tax credit which is currently USD$101,300, so if your income from your German IS is over USD$80K and/or your IB coin is over USD$20K, then you are looking at some potential tax.
Those are absolutely true sources, but FBAR (Foreign Bank and Assets Reporting) requires you to declare any and all accounts over USD$10K
"Taxpayers with an interest in, or signature or other authority over, foreign financial accounts whose aggregate value exceeded $10,000 at any time"
http://www.irs.gov/uac/newsroom/irs-rem ... tions-2015
Surely the US would, but so would Germany and any other EU tax authority. Of those the US is the most generous.
Re: Tax question from an IB Examiner
PG is right. You must report the income to the US. Whether it will be taxed depends on your total income from all overseas sources.
And that's a HUGE amount of scripts. Wow.
And that's a HUGE amount of scripts. Wow.
Re: Tax question from an IB Examiner
Ibo.org says it's $8 per script. 200 scripts per examiner. http://www.ibo.org/jobs-and-careers/bec ... g-periods/
We all know the IB sometimes lets examiners take more than 200 scripts, but 2,000 seems very improbable.
We all know the IB sometimes lets examiners take more than 200 scripts, but 2,000 seems very improbable.
Re: Tax question from an IB Examiner
It is a lot of scripts. But I do two components and I'm a senior examiner plus one of those components is a lot more than $8 a script. And yes, examiners can always ask for more scripts above their allocation.
But it looks like I'm safe - I do not plan on making anywhere near the $101,300 limit. Now I just have to find a US bank. Might go with Charles Schwab. Anyone have any experience with them?
But it looks like I'm safe - I do not plan on making anywhere near the $101,300 limit. Now I just have to find a US bank. Might go with Charles Schwab. Anyone have any experience with them?
Reply
@durianfan
Okay sure. CS is okay, if you have investment interests as well, or are running a company on the side, but you dont want that. What you want is a Credit Union (CU) you have membership or can get membership too. No fees, no minimum balances, no qualification schemes to avoid fees, about as long term free as free gets, because you dont need a lot of services you need three things: 1) Online banking to figure out when your IB coin is deposited and how much you have in the account. 2) A MC/VISA debit/ATM card that works internationally (to get your coin out at ATM's), and CUs generally have the lowest if any fees, essentially they dont charge for foreign ATM use and they give their members the best rates they can. 3) Checks, not that youll ever actually use one, but essentially use it as an instrument for remote deposit to move coin between accounts at different institutions. International wire service would be nice, but its not a component of what you need and want, because in Germany your basically going to use that debit card to withdrawal your funds, which Germany doesnt care about and has the least risk of being discovered.
Okay sure. CS is okay, if you have investment interests as well, or are running a company on the side, but you dont want that. What you want is a Credit Union (CU) you have membership or can get membership too. No fees, no minimum balances, no qualification schemes to avoid fees, about as long term free as free gets, because you dont need a lot of services you need three things: 1) Online banking to figure out when your IB coin is deposited and how much you have in the account. 2) A MC/VISA debit/ATM card that works internationally (to get your coin out at ATM's), and CUs generally have the lowest if any fees, essentially they dont charge for foreign ATM use and they give their members the best rates they can. 3) Checks, not that youll ever actually use one, but essentially use it as an instrument for remote deposit to move coin between accounts at different institutions. International wire service would be nice, but its not a component of what you need and want, because in Germany your basically going to use that debit card to withdrawal your funds, which Germany doesnt care about and has the least risk of being discovered.
Re: Tax question from an IB Examiner
One last question.
If the IB deposits my salary (let's say it's $15k) in a credit union in the US, since I didn't declare this salary in Germany but I did in the US, will the US then tax me on it?
If the IB deposits my salary (let's say it's $15k) in a credit union in the US, since I didn't declare this salary in Germany but I did in the US, will the US then tax me on it?