Living in Germany? What Americans need to know about filing US taxes

It comes as a surprise to many Americans abroad, including those living in Germany, that their US tax obligations don’t end just because they no longer live in the United States. The US tax system is based on citizenship rather than residence, so US citizens and Green Card holders must still file a US tax return each year.

Filing from abroad can quickly become complex, especially when reporting foreign income, international disclosure requirements, and applying credits and exclusions correctly across two tax systems.

Filing US taxes from Germany does not always mean you owe US Tax

Filing a US return while living in Germany doesn’t necessarily mean you’ll owe US tax. Many expats end up owing little or nothing when they meet reporting requirements and apply available credits or exclusions correctly. However, filing from abroad involves more than simply reporting income.

US expats may have additional reporting obligations and need to understand how expat tax benefits apply to their specific situation. As a result, there’s no one-size-fits-all approach to filing US taxes from abroad.

Double taxation: A common concern for US expats in Germany

Paying local German taxes to the Finanzamt does not alleviate US tax obligations. Fortunately, the IRS provides specific expat tax provisions, most notably the Foreign Earned Income Exclusion (FEIE) and the Foreign Tax Credit (FTC), to help reduce or prevent double taxation.

Choosing the correct option depends on your income sources, local tax rate in Germany, and eligibility for other US tax benefits.

The Foreign Tax Credit

The Foreign Tax Credit allows US expats to claim a dollar-for-dollar credit for foreign taxes already paid in Germany against their US tax liability. For expats in higher-tax countries like Germany, the FTC can often eliminate US tax. Unlike the Foreign Earned Income Exclusion, the FTC can apply to both earned and passive income. 

The Foreign Earned Income Exclusion

The Foreign Earned Income Exclusion allows US expats to exclude up to 130.000 US dollars (USD) of income earned in Germany from US taxation, and it applies to employment or self-employment income.

However, using the FEIE can affect eligibility for other tax benefits that require earned income not excluded under the FEIE, such as the refundable portion of the Child Tax Credit or contributions to US retirement accounts.

Neither the FEIE nor the FTC reduces the US self-employment tax. In some cases, the two can be used together; for example, the FTC may be applied to earned income above the FEIE exclusion limit. 

Foreign bank accounts and asset reporting 

Many Americans living in Germany are required to report foreign bank accounts and financial assets, even if they owe no additional US tax. One of the most common requirements is the Foreign Bank Account Report (FBAR), which applies when the combined balance of non-US accounts exceeds 10.000 USD at any point during the year. 

Some expats may also need to file Form 8938 under the Foreign Account Tax Compliance Act (FATCA) if they meet higher asset thresholds. Filing one does not replace the other. 

These forms are not about owing more tax and are for informational purposes only; however, missed reports can result in steep penalties, even for non-willful violations.

Need assistance with your US taxes? MyExpatTaxes is here to help!

More complex situations: Self-employment, businesses, pensions, and investments

US expats in Germany with self-employment income, investments, or business interests often face additional taxes and reporting considerations. While self-employed individuals may be subject to US self-employment tax, the US–Germany totalisation agreement is intended to prevent double social security contributions between the two systems.

Expats who own foreign corporations or hold interests in foreign partnerships may also have additional complex reporting obligations, even if no income is generated.

Certain foreign investments, including some pensions, may be classified as Passive Foreign Investment Companies (PFICs), which can require complex reporting and result in less favourable US tax treatment. In addition, German foreign pension plans generally do not receive the same tax-advantaged treatment under US tax law as they do under local law.

US tax deadlines for expats in Germany

While the standard US tax deadline is April 15, Germany’s July 31 tax deadline means expat filing extensions can help align US expat tax benefits with taxes already paid in Germany.

These are the US tax deadlines:

• April 15: Standard US tax deadline. Any US tax owed must be paid by this date, even if you file later.
• June 15: Automatic filing extension for Americans living abroad.
• October 15: Additional filing extension available if requested on Form 4868. 

It doesn’t have to be complicated

Filing US taxes from Germany doesn’t have to be complicated or expensive. Planning ahead and using tools designed specifically for expats can make the process feel more manageable. With the right approach, you can spend less time worrying about US taxes and more time focused on your life in Germany.

New to the Netherlands or settling in? Meet expat-friendly businesses, attend free workshops on housing, careers and education, and unlock fair-only offers at IAmExpat Fair Amsterdam (March 7, 2026, 10:00–17:00, Beurs van Berlage). Get tickets: https://amsterdam.iamexpatfair.nl/