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    Foreign Income

    Have a client with earnings from Germany and paid tax to that country. Being a US citizen, they will have to file a US tax return. My question is the best way to go about converting their German pay to US dollar for tax purposes. Would appreciate any input. Thanks.

    #2
    Originally posted by TaxprepP View Post
    Have a client with earnings from Germany and paid tax to that country. Being a US citizen, they will have to file a US tax return. My question is the best way to go about converting their German pay to US dollar for tax purposes. Would appreciate any input. Thanks.
    You need to get more info. my friend. What type of income? Check the tax treaty US has with many foreign countries about taxation of income already taxed in the home country. Needs research.

    Review tax treaties between the United States and foreign countries. The treaties give foreign residents and U.S. citizens/residents a reduced tax rate or exemption on worldwide income.
    Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

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      #3
      I will admit I feel a little out of my element with this one. I have done tax returns for US citizens earning wages overseas but not taxed by the country earned in. This client earned wages from a German company. Living and working there they paid tax to Germany on those earnings. I scanned and read through the treaty link given but had some trouble interpreting for wages earned. A little light on this would be helpful.

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        #4
        Exchange rates

        Here is link for rates of exchange as of December 31, 2017

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          #5
          Originally posted by Gene V View Post
          Here is link for rates of exchange as of December 31, 2017

          https://www.fiscal.treasury.gov/fsre...n-12-31-17.pdf
          Awesome. Thank you.

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            #6
            I have used another website for years (www.x-rates.com) for conversion of USD to other currencies, and vice-versa. In the case of wages paid over the course of a year, you need to know the monthly rates and average them by 12 (for a full year) to get an accurate figure. Then Foreign Income Exclusion may apply.
            Last edited by Burke; 03-07-2018, 01:06 PM.

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