US tax advisors for US-Swiss citizens, expats and investors


Switzerland specific tax issues

  • Tax evasion: The US Department of Justice has been working with Swiss banks for nearly 10 years. They have a trove of information on people who came forward, and those who did not. There can be an assumption you did something wrong, even if you didn't. Doing business in Switzerland is not a crime, even though the IRS can make it seem that way.

  • Blacklisted banks: People who legally inherited accounts for people who may, or may not have, engaged in tax evasion. The IRS will look to attribute sins of the father to the children, even though children did not know about confusing reporting requirements.

  • The three tiers of Swiss pensions:  Tier one reporting is generally easy, as it's treated like social security. Tier two reporting is more complicated, and tier three is the most complicated tax work that has exposure to steep penalties.

  • Swiss life insurance: Even though it's called "life insurance", it is likely treated more like an investment and needs to be reported…and it's not tax free.


US-SwissTax Treaty Information

The US has a tax treaty with Switzerland. Under tax treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate or are exempt from U.S. taxes on certain items of income they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific items of income. Under these same treaties, residents or citizens of the United States are taxed at a reduced rate, or are exempt from foreign taxes, on certain items of income they receive from sources within foreign countries. Most income tax treaties contain what is known as a "savings clause" which prevents a citizen or resident of the United States from using the provisions of a tax treaty in order to avoid taxation of U.S. source income.


Are you a US person living in Switzerland?

The US taxes its persons on a worldwide basis. So what you earn in Switzerland, even if it is taxed by the Swiss taxing authority, is subject to additional taxes by the IRS. This is true even if you have a "tax-free" account in Switzerland. However, you are entitled to a credit for taxes paid. In the alternative, there is a foreign income exclusion which will exempt a portion of your income from income taxes.


Are you a Swiss person living in the United States? (Visa/Substantial Presence Test)

If you are a Green Card holder you are subject to universal taxing jurisdiction on all your income, anywhere in the world. If you are a visa holder the rules are a bit more complicated about when universal taxing jurisdiction is triggered.


Foreign Earned Income Exclusion

Citizens and residents living and working outside the U.S. may be entitled to a foreign earned income exclusion that reduces taxable income. In addition, you may exclude housing expenses, but with limits. There are limits and special rules about who qualifies for the exclusion, and we can help you understand if you qualify. 


Foreign Tax Credits

This is a non-refundable tax credit for income taxes paid to a foreign government as a result of foreign income tax withholdings. The foreign tax credit is available to anyone who either worked in a foreign country or has investment income from a foreign source. There are qualifying factors, and we can help you understand if you are eligible to tax advantage of this credit. 


Offshore Voluntary Disclosure Programs

If you have made a mistake in previous IRS tax filings, or haven't filed at all, we can help. We are the nation's premier offshore disclosure firm. We have helped thousands of Canadians and others from around the globe properly disclose to the IRS. We can help you too. Click here to visit our Offshore Disclosure summary page.


If you need assistance with any of these issues, contact us. We can help. Any information you share with us will be kept confidential. Call us at 888-727-8796 or email info@irsmedic.com.