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Discussion Starter · #1 ·
I'm married to a French citizen and have lived full time in France for 3 years. But due to the fact I can find no way to make a decent living in my town, I bought a house in Florida, Homesteaded it (making it my official permanent home), started a business there and have kept my U.S. based contract for 3 years and will in the future too (making 100% of my income U.S. based), and will be spending 7 months a year in the U.S. and only five months in France. I'm assuming that this will take my residency and tax liability back to the U.S. instead of France. I'm quite sure that as far as the U.S. is concerned they'll expect me to pay taxes there. At least that's what I hope since my taxes are 25%-45% in France versus 9% in the U.S. The one question is that since my husband is French and he has to include me on his annual taxes, does that mean he still has to include my income too, thereby paying double taxes, i.e., me paying taxes in the U.S. and him paying taxes in France on my U.S. salary. Would he claim me but not my income on the France tax forms? I know that the US and France has a treaty stating I can't be double taxed - I either pay in the US or in France but not both. We have no idea how to handle this and every accountant I've contacted in France wants 250 to 450 euros per hour to give us the answer. I can't afford that. Anyone else had this situation and can offer some insight? Thanks, Confused in France:confused:
 

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Can't say I've had this situation before, but it's not impossible to work out.

First of all, yes you will have to declare your US income both in the US and in France. In the US, you're going to have to file as "married filing separately" since your French husband doesn't have any US tax liability. But at least you only have to declare you own worldwide income, and not his.

Now, in France, you're taxed by household, so yes, your husband is supposed to claim all of your worldwide income along with his. But, he should also file a form 2047, where he declares (again) your US income as "foreign income". There is a section right on the front of the form for "Traitements, salaires" which is where he should disclose your US income and the fact that it comes from the US. If you have bank or investment interest from the US, that goes on a different part of the same form. On the back page of the form, there's a section to itemize your foreign income according to how it's treated in France (i.e. excluded entirely from taxation or included in grossing up your income to determine you tax bracket, but then granted a tax credit). The quickest way to determine where what goes is to use one of the French tax programs, like ClickImpot, but you can probably find the proper treatment somewhere in the income tax instructions, too.

The tax inspector is supposed to use the proper treatment (according to the tax treaty) in determining your French income tax, but sometimes they aren't up on the latest international tax treatments (this is where the tax preparation programs come in handy - if the result is wildly different from what you were expecting you can question it and surprisingly enough, the tax examiners here are open to adjusting things).
Cheers,
Bev
 

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Discussion Starter · #3 ·
Wow! Thanks, Bev, you are a wealth of info. From looking at this, we've been getting wrong advice from the Tax offices here and have been getting double taxed for two years on my U.S. income. But I also don't think my husband has been filling out the forms correctly because he wasn't given the right advice on how to do it. Our small city doesnt know what to do with us and my special situation. But I knew once I was a U.S. resident officially again that we should not be paying taxes on my U.S. income so I needed to get it straight. Thanks so much for your help. You're a gem.

Can't say I've had this situation before, but it's not impossible to work out.

First of all, yes you will have to declare your US income both in the US and in France. In the US, you're going to have to file as "married filing separately" since your French husband doesn't have any US tax liability. But at least you only have to declare you own worldwide income, and not his.

Now, in France, you're taxed by household, so yes, your husband is supposed to claim all of your worldwide income along with his. But, he should also file a form 2047, where he declares (again) your US income as "foreign income". There is a section right on the front of the form for "Traitements, salaires" which is where he should disclose your US income and the fact that it comes from the US. If you have bank or investment interest from the US, that goes on a different part of the same form. On the back page of the form, there's a section to itemize your foreign income according to how it's treated in France (i.e. excluded entirely from taxation or included in grossing up your income to determine you tax bracket, but then granted a tax credit). The quickest way to determine where what goes is to use one of the French tax programs, like ClickImpot, but you can probably find the proper treatment somewhere in the income tax instructions, too.

The tax inspector is supposed to use the proper treatment (according to the tax treaty) in determining your French income tax, but sometimes they aren't up on the latest international tax treatments (this is where the tax preparation programs come in handy - if the result is wildly different from what you were expecting you can question it and surprisingly enough, the tax examiners here are open to adjusting things).
Cheers,
Bev
 

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Wow! Thanks, Bev, you are a wealth of info. From looking at this, we've been getting wrong advice from the Tax offices here and have been getting double taxed for two years on my U.S. income. But I also don't think my husband has been filling out the forms correctly because he wasn't given the right advice on how to do it. Our small city doesnt know what to do with us and my special situation. But I knew once I was a U.S. resident officially again that we should not be paying taxes on my U.S. income so I needed to get it straight. Thanks so much for your help. You're a gem.
If you've paid French tax on your US income for the last two years, you might want to schedule an appointment with your tax examiner to explain the situation and see if you can get either a refund or a tax credit for the overcharge. We've found the fisc to be remarkably receptive to correcting honest mistakes, especially if you admit that it was your fault for filling out the forms wrong. (Never accuse a fonctionnaire of having made a mistake!)
Cheers,
Bev
 

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Discussion Starter · #5 ·
French and US taxes

Hi, Bev, I've been a little afraid to pursue this based on other advice I've gotten from business consultants in France on their paid membership sites. Two of them recently said that I should have set up an Auto Entrepreneur or SARL business and channeled all my foreign salary through those and paid French taxes on that income at French tax rates (20% for AE with no tax deductions; or 45% on SARL with tax deductions). That didn't make sense to me especially since my U.S. CPA tax accountant said I had to pay my self employment/social security taxes in the US no matter what! Plus the tax offices here in our town told us to do the 2047 form but nothing about the back of the form and getting a tax credit on the taxes I paid in the U.S.

Anyway, because of all this confusion I've been discouraging my husband from pressing the issue with the tax offices here in fear that we should have been doing the AE or SARL status all this time, and the tax office would eventually figure it out and fine us or give us a big bill for back taxes. But the advice you gave makes the most sense and seems to match, mostly, what the tax offices have been telling us. Thanks again. :whoo:


If you've paid French tax on your US income for the last two years, you might want to schedule an appointment with your tax examiner to explain the situation and see if you can get either a refund or a tax credit for the overcharge. We've found the fisc to be remarkably receptive to correcting honest mistakes, especially if you admit that it was your fault for filling out the forms wrong. (Never accuse a fonctionnaire of having made a mistake!)
Cheers,
Bev
 
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