[davidcom]

Hello all. I'm getting around to filing my French taxes today (I'm late!). I have a few questions. Hopefully the answers I get here may help US expats in the future.

First, here's my situation:

I'm an American, in France with a CeT visa. I'm here with my wife and two children (ages 10 and 5), all of whom are American. I already filed my US taxes back in March. For my French taxes, I have two sources of income:

1. A job in France with a French company where my final "net imposable" for 2016 was 5,530 euros.

2. A salaried job in the US, with the following totals:
Adjusted Gross Income: $82,000
Taxable income: $53,000
Total tax: $6,800
Total Payments: $4,800
So after filing, I owed $2,000 to the Feds (which I paid in March)

On impots.gouv.fr, the 5,530 euros from the French company is already automatically filled in in "Revenus d'activité connus" (IAJ).

Ok, here are some questions:

1. On the online impots tax form, on which line do I enter my US revenue? I think it's this one:

- Autres salaires de source étrangère (1AG)

2. And what amount should I enter? (Adjusted Gross Income, Taxable income?). I believe the amount I enter is the Taxable Income minus the Total Tax, so $46,200 (or 41,500 eruos).

3. Then I believe I need to fill out form 2047 "Revenus de source Etrangère". Can anyone confirm that I'd fill out Section 8 "Revenus exonérés retenus pour le calcul du taux effictif".

4. Also, any ideas on what would be a good thing to put in the same Section 8 when it asks for "Nature du revenu"? Should I put "travail" or maybe "société américaine"?

Finally, if I've understood correctly, this is how this all works on the French tax side:

Since I've already paid US taxes to the IRS on both my French and US income, France will not tax me on my US income. But they use the US income to determine my French tax bracket. Once they determine my tax bracket, they will apply that ONLY to the 5,530 euros of French income I earned. Does that sound correct?

5. Does anyone have an idea of what my French tax amount will be, given the low French income amount, that I'm married with two dependents?

Thanks to all!

 

[Bevdeforges]

OK, the big question here is just how long have you been living in France? It will make a huge difference if you are talking about US salary income from before you made the move to France, or if you are "telecommuting" to your job back in the US from your base in France.

You don't get to choose which country you pay your taxes to. So if you were resident in the US while earning your US salary, you don't start reporting income in France until the date of your move (handled in the part of the 2042 form where you report a change of address during the 2016 tax year). If you are telecommuting, then you report all your US income (gross - before any deductions) as salary (i.e. add it to whatever was preprinted in line 1AG), pay French tax on it, and then claim the Foreign Tax Credit on your US tax return (or use the Foreign Earned Income Exclusion to exclude your French salary income - from both your US and French jobs).

But the way you're proposing to report it isn't correct.
Cheers,
Bev

 

[Bevdeforges]

Also, one further question - how did you report your French salary income on your US taxes? FEIE or FTC? (You are supposed to report worldwide income on both US and French income taxes.)
Cheers,
Bev

 

[davidcom]

Thanks Bev. I've just contacted a tax expert. You're follow up questions made me realize that my situation is quite complicated. I travel a lot for my job (video production), with a home in the US, a rental in France, and also spending long periods of time in other countries (UK, Spain...). I'm going to let an expert handle it!

Thanks again.

 

[Bevdeforges]

The first couple times around, this stuff seems complicated. But I suspect that once you get your "tax residence" sorted out, it will kind of all fall into a somewhat logical pattern. Keep us posted on your progress - you're far from the only person in this sort of situation.
Cheers,
Bev