She considers Texas home, but lives in Germany: cue the U.S. double taxation nightmare

“I don't think it's fair that hard-working American citizens should be double taxed on income that they earned abroad that is already taxed at a very high rate. Even if foreign tax credits and the foreign earned income exclusion mitigate some of the pain, double taxation discourages U.S. citizens from progressing in their careers abroad and imposes an excessive financial burden by taxing the same income and assets twice in the first place.”

— Emily in Germany

Dear Congress,

I was born in and grew up in Houston, Texas. I moved to Germany around 5 years ago, at age 22, to pursue my career working for an American technology company. But ever since then, I have struggled tremendously with the confusing tax regulations in Germany and the United States.

I have considered giving up my American citizenship so I don't have to deal with the unclear tax reporting, but ultimately didn't go through with it because I love my country and felt like it would strip me of my identity completely. I still vote in Texas, which I still consider home.  

Every year, I undergo a lot of stress with the process of accurately reporting to the IRS from abroad. I have to pay an accountant a couple of hundred dollars a year for help. I also find it frustrating because I already pay taxes in Germany, where my earnings are taxed at one of the highest rates in Germany (approx. 42%).

I don't think it's fair that hard-working American citizens should be double taxed on income that they earned abroad that is already taxed at a very high rate. Even if foreign tax credits and the foreign earned income exclusion mitigate some of the pain, double taxation discourages U.S. citizens from progressing in their careers abroad and imposes an excessive financial burden by taxing the same income and assets twice in the first place.

Tax equity, please!

In my opinion, double taxation violates principles of tax equity and discourages international career advancement and investments. There are only two countries in the whole world that tax its citizens worldwide - the USA and Eritrea. It's not normal.

I encourage you to support Rep. Darin LaHood’s Residence-Based Taxation for Americans Abroad Act. This is the first bill in years to provide a comprehensive solution to the problems faced by Americans abroad and which the National Taxpayer Advocate just underlined in her latest report to Congress.  

Please remember that in an election year there is nothing that matters more to Americans abroad then ending double taxation and stupid FATCA and FBAR reporting requirements—like President Trump promised he’d do.

Sincerely,  

Emily in Germany