Hello,
I have been trying to read and understand how I should go about this issue to prevent paying taxes for USA source dividends both in Germany and then USA (i.e getting taxed twice for the same dividends).
We are US citizens, and moved in 2022 to Germany (one spouse in June, other in October, 2022), both are now German tax residents (as we moved with intention to live there for longer than 6 months, actually more than that).
Our main source of income is passive from dividends from stock and bond mutual funds held at a brokerage in USA. Being a US citizen there is no withholding tax on the dividends. We are currently preparing to file Taxes first in Germany and then in USA.
I would like help with a few issues:
1) I realize Germany will tax us 26.375% on these dividends (since I cannot claim that I have already paid taxes on this income in USA, since as a US citizen there is no tax withholding). Per US/Germany tax treaty, USA also reserve the right to tax 15% on the US source dividends. How do I go about filing tax returns both in Germany and USA so I don't have to pay in taxes on the same dividends in both countries. I would also want to avoid paying taxes in both countries and then filing again an amendment to get the taxes partially refunded.
2) Our second issue unique to us is that we are not just partial year tax residents in both countries, but we (spouses) moved in different months. We have received a combined 1099-DIV for the year which only shows the total dividends for the entire year, I understand that I am liable for full tax on these dividends in US (for the partial year we lived here) and liable for taxes in Germany for the partial year we lived there (how do I report the US part and German partial year on Turbotax dividends income section).
I would really appreciate some expert advice and if someone has actually done this partial year taxation for US/Germany.
Thanks for reading.
