Foreign Income

[TaxprepP]

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.

[ATSMAN]

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.

https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z

[TaxprepP]

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.

[Gene V]

Exchange rates

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

https://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/itin-12-31-17.pdf

[TaxprepP]

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.

[Burke]

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.