[paris19th]

Hi Everyone:
After my triumphant passing of the code de la route last year, this American is now dealing with new challenges while living in France. As an artist, when I first came to France over 6 years ago, I was working a lot in Paris as a self employed for many different employers on different projects. Since the last two years, I have moved out of Paris to the compagne and my work shifted mostly to out of the country. Many of these employers chose to pay me in Euros ( or dollars with American clients) without declarations, which means I was not paying taxes on of it.

If anyone knows, my questions are two-fold: First- is there a status I can apply for as a self employed person, like in american, which would reduce my tax rate and allow me a system to pay my taxes. As of now, the French authorities do not want me to account for earnings which are non declared. Secondly, can the French authority tax my income in addition to my paying taxes to the U.S. on my Global income? To say also, in the past I would try and "cache" some paid-under-the-table projects in France with a person who had agent status and could deduct taxes from my earnings on a project. Only catch is that he required a small fee and then the amount I received was half my original payment: If I made €1000 liquide, I would receive about €500 earnings after tax filing fee and taxes paid. It hurts very much and I'm sure there must be a better way. Thanks....:confused2:

 

[-mia-]

Ok, I don't know what you are doing but I'm thinking you are doing something wrong.

Your first tax obligation is to France. Your secondary obligation is to the US. Thus you deduct that taxes you paid in France from those of the US. But you are exempt from US taxes (but not from filing) really if you earn under around US90K.

However, I'm guessing there is something wonky going on here as you wrote: "As of now, the French authorities do not want me to account for earnings which are non declared. " ???? Huh? What does that mean?

What kind of artist are you? There is (I'm sure) a guild that you should be a member of and they will help you work out the type of status (most likely auto-entrepreneur) that you should be working under.

 

[Bevdeforges]

The way it works is that you must declare your worldwide income to France each year AND if you are a US citizen, you must also declare your worldwide income to the US as well.

There is a tax treaty in effect between the US and France that is supposed to eliminate double taxation - but it isn't perfect.

Your earned income (i.e. what results from your work in France) is excluded from taxation using form 2555. This means you declare it, and then can subtract off what the IRS considers "earned income" before you calculate any tax due. For all other forms of income, you declare it to the US (in full) and then apply any French income taxes paid on that income as a tax credit against the taxes due to the US.

For a peek at how the US side of this works, take a look at Publication 54 on the IRS website.
Cheers,
Bev

 

[rynd2it]

But you are exempt from US taxes (but not from filing) really if you earn under around US90K.

Now where did that number come from? I can't find it in any official documents.

Thanks

 

[Bevdeforges]

Now where did that number come from? I can't find it in any official documents.

Thanks

It's the FEIE figure - currently a bit more than $90K but that's the number usually cited. It only applies to earned income (i.e. salary, for the most part).
Cheers,
Bev

 

[-mia-]

It's the FEIE figure - currently a bit more than $90K but that's the number usually cited. It only applies to earned income (i.e. salary, for the most part).
Cheers,
Bev

Yes. Thank you.

And "exempt from tax" is probably not the official term either. Basically you can exclude 90K (+/-) . The point being that our OP friend sounds like he makes much less than the 90K. So he shouldn't be afraid to file. It's unlikely he'll owe tax to the US IF he is paying tax in France which he should be.

 

[rynd2it]

It's the FEIE figure - currently a bit more than $90K but that's the number usually cited. It only applies to earned income (i.e. salary, for the most part).
Cheers,
Bev

Ah, I wonder if US Social Security counts as 'earned income' - but I'll bet that IRA distributions don't

Cheers

 

[Bevdeforges]

Ah, I wonder if US Social Security counts as 'earned income' - but I'll bet that IRA distributions don't

Cheers

US Social Security is taxable or not based on a number of conditions, including your filing status (i.e. if you file as married filing separately, it's 85% taxable), your other income, where you are living and (occasionally) what nationality you hold. Publication 915 - or check Pub. 17, where you can find a worksheet to determine exactly how much of your social security is taxable.

No, SS benefits are not considered earned income - and neither are IRA benefits. When you opened your IRA, the deal was that you'd pay your taxes when you took your distributions. Chickens coming home to roost, or something to that effect.
Cheers,
Bev

 

[Bevdeforges]

To get back to the OPs original questions, however...

If anyone knows, my questions are two-fold: First- is there a status I can apply for as a self employed person, like in american, which would reduce my tax rate and allow me a system to pay my taxes. As of now, the French authorities do not want me to account for earnings which are non declared.

Huh? No idea what "status" you are referring to in the US that reduces your tax rate. For the French side of things, there's the auto-entrepreneur registration which will let you pay your cotisations as a flat rate of what you take in. Income taxes work basically that way, too, but you still declare the gross revenue at the end of the year.

Secondly, can the French authority tax my income in addition to my paying taxes to the U.S. on my Global income? To say also, in the past I would try and "cache" some paid-under-the-table projects in France with a person who had agent status and could deduct taxes from my earnings on a project. Only catch is that he required a small fee and then the amount I received was half my original payment: If I made €1000 liquide, I would receive about €500 earnings after tax filing fee and taxes paid. It hurts very much and I'm sure there must be a better way. Thanks....:confused2:

If you are resident in France, you owe income taxes to the French fisc. So, yes, they can tax your income whether or not you pay taxes to the US. You also have a filing obligation to the US government as long as you still hold your US citizenship - though you can elect to "exclude" earned income via form 2555. The US then expects you to take a tax credit for taxes paid to France.
Cheers,
Bev