US taxes for Americans in Germany
What moving to Germany does to your IRS filing — the treaty and credits that stop double taxation, the reports you must file, and the German rules once you're resident.
Front-loaded answerAs a US citizen in Germany you file two systems: the IRS on worldwide income every year (the US taxes by citizenship), and Germany as a resident once you have a home there or stay 183+ days. The US–Germany tax treaty, a Social Security totalization agreement, and the Foreign Tax Credit keep almost all Americans from paying tax twice — and because German rates are higher than US ones, most owe little or no US tax.
Your US filing doesn't go away — but double tax usually does
The US taxes citizens on worldwide income regardless of residence, so your Form 1040 continues. Because Germany is a higher-tax country, most Americans rely on the Foreign Tax Credit (not the FEIE): the German tax you pay generally exceeds your US liability, wiping out the US bill. The FEIE still helps in early or lower-tax years.
| Tool | What it covers | Figure |
|---|---|---|
| FEIE (Form 2555) | Earned income (salary, freelance) | $130,000 (2025); $132,900 (2026) |
| Foreign Tax Credit (Form 1116) | German tax paid (usually exceeds US) | No fixed cap |
| Totalization agreement | Social Security — one system only | In force since 1979 |
The reports that catch Americans out: FBAR & FATCA
Opening a German bank account triggers two US disclosures. They're information reports, not extra taxes — but the penalties for skipping them are severe, and some German banks are wary of onboarding US citizens because of FATCA.
The German side: residency, rates & church tax
Germany sideHave a home in Germany or stay 183+ days and you're a German tax resident, taxed on worldwide income at progressive rates of 0%–45%, plus a solidarity surcharge on higher incomes. The totalization agreement stops you paying Social Security into both systems on the same earnings.
- PFIC trap: EU-domiciled funds/ETFs are punitively taxed by the IRS — hold US-domiciled funds instead
- Church tax (8–9% of your income tax) applies only if you register as a church member — you can opt out
- The treaty, Foreign Tax Credit ordering, and PFIC rules aren't DIY — use a US–Germany cross-border preparer
Frequently asked
- Will I pay tax twice living in Germany as an American?
- Almost never. The US–Germany tax treaty, the Foreign Tax Credit, and a Social Security totalization agreement prevent double taxation. Because German taxes are generally higher than US ones, the Foreign Tax Credit usually erases any US tax owed — though you still file a US return every year.
- Do I have to pay German church tax?
- Only if you register as a member of a recognized church, in which case it's 8–9% of your income tax. You avoid it by not registering as a church member.
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Verified against official sources. Every figure on this page is checked against primary US (IRS, State Dept., SSA) and Portuguese (AIMA, Autoridade Tributária) government sources and dated. Maintained by the Plan B Atlas editorial team.
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