Welcome to Wanderlust Tariff: U.S. Taxes for Americans Living in Germany

Moving to Germany is an exciting step—new opportunities, new systems, and a new way of life. But for Americans abroad, one thing doesn’t change: U.S. tax obligations follow you, no matter where you live.

Wanderlust Tariff was created to help Americans in Germany navigate that reality with clarity and confidence. This blog will be a monthly resource covering U.S. tax compliance, common pitfalls, and planning considerations specific to life in Germany—all from the perspective of professionals who live here themselves.

The U.S. Tax System: Citizenship-Based Taxation

The United States is one of the only countries in the world that taxes based on citizenship rather than residency. That means that even if you live and work entirely in Germany, you are generally still required to:

• File a U.S. federal income tax return each year

• Report worldwide income (salary, self-employment income, investments, etc.)

• Disclose certain foreign bank accounts and financial assets

This surprises many Americans after their move, especially those who are fully integrated into the German system and already paying German taxes.

Paying German Taxes Does Not Mean You’re Done with the IRS

A common misconception is that if you pay tax in Germany, you no longer owe anything to the U.S. In reality, while German taxes often reduce or eliminate U.S. tax liability, they do not eliminate the filing requirement.

Key mechanisms that may apply include:

• Foreign Earned Income Exclusion (FEIE) – Allows eligible taxpayers to exclude a portion of earned income

• Foreign Tax Credit (FTC) – Offsets U.S. tax with taxes paid to Germany

• Tax treaties – Help coordinate (but not replace) reporting obligations

Choosing the wrong approach—or combining them incorrectly—can lead to missed benefits or compliance issues.

Common Reporting Requirements Americans in Germany Encounter

In addition to your annual tax return, many Americans abroad must deal with additional reporting, including:

• FBAR (FinCEN Form 114) – Required if foreign bank accounts exceed USD 10,000 in aggregate

• FATCA (Form 8938) – Applies to certain foreign financial assets

• Self-employment considerations – Especially relevant for freelancers and GmbH shareholders

• German investment reporting – Which can trigger complex U.S. rules, including PFIC treatment

These forms often carry significant penalties if missed—even when no tax is owed.

Why Living in Germany Changes the Equation

Germany has its own tax calendar, classifications, and investment norms that don’t always align neatly with U.S. rules. Common friction points include:

• Differences in income timing and classification

• Treatment of German pensions and retirement products

• Local investment vehicles that are tax-efficient in Germany but problematic for U.S. reporting

• Currency conversion and documentation requirements

  
  

Without guidance grounded in real expat experience, it’s easy to overlook issues that only surface years later.

What Wanderlust Tariff Is Here to Do

Wanderlust Tariff focuses on U.S. federal tax preparation and advisory services for Americans living in Germany. Our goal is simple: remove uncertainty, reduce risk, and help you stay compliant without unnecessary stress.

We work with:

• Newly arrived expats

• Long-term residents who need ongoing filings

• Individuals catching up after missed years

• Americans planning investments or financial changes in Germany

In most cases, we offer clear, flat-fee pricing, so you know what to expect upfront.

What This Blog Will Cover Going Forward

Each month, we’ll publish practical articles on topics such as:

• Filing U.S. taxes for the first time from Germany

• FBAR and FATCA basics (and common mistakes)

• Freelancing and self-employment across borders

• German investments and U.S. tax consequences

• Planning ahead to avoid IRS compliance issues

• Developing tax news affecting Americans living abroad

We hope this blog will be helpful to building your own understanding of the tax considerations especially applicable while living abroad. We can't wait to work together to get and keep you compliant.