US Tax Guide for Dual Citizens Living in Germany

Dual citizens (US + Germany) face unique US tax challenges. As US citizens, they owe US tax on worldwide income regardless of where they live. Germany's worldwide income taxation and the US-Germany tax treaty create additional complexity. FileAbroad helps dual citizens in Germany navigate FEIE, FBAR, and the cross-border questions that complicate filing.

Key Tax Issues for Dual Citizens in Germany

• Worldwide US taxation: US citizens owe US tax on worldwide income, even if they live in Germany and are German citizens.
• German tax residency: If you have a domicile (Wohnsitz) or habitual abode (gewöhnlicher Aufenthalt) in Germany, you are a German tax resident. You may owe tax to both countries.
• FEIE: Dual citizens can claim FEIE on foreign earned income if they have a foreign tax home and meet the physical presence or bona fide residence test.
• FTC: Dual citizens can claim FTC for German tax paid on income that is also taxed by the US. Germany's high tax rates make FTC valuable.
• Totalization agreement: US-Germany totalization agreement prevents double social security taxation.

FEIE vs FTC for Dual Citizens in Germany

FTC is often more valuable than FEIE due to high German tax rates (up to 45% plus solidarity surcharge and church tax). FEIE may be better for dual citizens in their first years abroad or with income below the FEIE limit.

FBAR & Reporting for Dual Citizens in Germany

German bank accounts (Deutsche Bank, Commerzbank, Sparkasse), investment accounts, and pension accounts (Riester, Rürup) are reportable on FBAR if the aggregate value across all foreign accounts exceeds $10,000.

Common Mistakes Dual Citizens Make in Germany

1. Not filing US tax returns — US citizens owe US tax on worldwide income regardless of where they live.
2. Not reporting German bank accounts and pension accounts on FBAR — All foreign accounts are reportable.
3. Not claiming FEIE or FTC — These tools can significantly reduce your US tax.

When to Get Professional Help

You should consider professional help if you have foreign accounts exceeding $10,000 or complex income situations.

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FileAbroad explains U.S. federal tax and U.S. international information-reporting consequences of documented foreign facts. It does not provide foreign-country legal or tax representation, valuation opinions, banking or remittance advice, or advice on what a foreign authority will accept.

Scope statement reviewed 2026-08-30 · FileAbroad product/content owner