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German Law/Taxes for American Freelancers

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Question
Hello

I am an American female from California married to a German citizen. I have been living in Germany since June 2012 on a spouse visa. I have been working as a freelancer at a language school [like InLingua or Berlitz] since February of 2013. To date, I have made less than 8000 Euros. I have read on several sites and forums that, as a married person, unless I make over 8300 euros [give or take up to 50 euro] I don't have to pay taxes. However, quite a few of my sources have been English community forums such as Toytown and I don't want to file, or not file, taxes based on secondary advice.

If you know anything about whether I am also obliged to pay taxes to the USA, where I am still a citizen, it would be greatly appreciated, as I haven't been able to find much information specifically for American freelancers working in Germany. Most of the information I've found assumed that the expat in question was working a full time job at a company or something of the sort in Germany. However, I know that this is not your area of expertise so no worried if you don't know.

Thank you very much.

Joy

Answer
Hello Joy,

for 2013, the basic tax-exempt amount is 8,130 EUR. If your profit (not your revenues) is below that amount, you do not need to pay any income tax in Germany. If your revenues are below that amount, you don't even need to bother about showing receipts for expenses to get your profit below that threshold.

This is your personal tax-exempt amount, so it has nothing to do with whether you are married or not. The marriage comes into play if you decide to file jointly. If your husband earns more than you, he would benefit from you earning less. In that case, it would even make a difference what amount you earn below the threshold, because the average of both of your incomes will be taken into consideration for the tax rate within the range of progressive income tax bands.

The question of whether you have to pay taxes is a different one from whether you have to file for taxes. If you have registered as a self-employed freelancer, then you are required to file. You can do that yourself, it's a relatively simple form and it won't take you more than an hour maximum.

As a US citizen, you also have to file a tax return with the IRS, regardless of whether you live in the USA or not: http://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Residen
There is a double-taxation treaty in place between the USA and Germany which should ensure that your combined tax burden is not higher than the tax burden in the country where it would be highest if all your income was only taxed there.

Andreas Moser
www.moser-law.com
www.andreasmoser.wordpress.com  

German Law

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Andreas Moser

Expertise

Extensive experience in international family law, especially international child abductions and child custody cases. All other areas of German law as well: constitutional law, criminal law, business and contract law, immigration law, inheritance law, and so on.

Experience

Lawyer in Germany from 2002 to 2009. Lawyer for US Army JAG Corps before. Bar-certified specialisation in family law and in administrative law. Articles and lectures about international and domestic family law.

Publications
www.andreasmoser.wordpress.com

Education/Credentials
2000 Law Degree from University of Regensburg, Germany 2002 admitted to the bar (until 2009) 2013 MA Philosophy at the Open University, UK

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