Frequently Asked Questions

American citizens and green card holders are taxed on their worldwide income, regardless of where they live or where their income is derived. Whether or not an American taxpayer actually needs to file depends on their level of income and filing status, such as single, married filing jointly, head of household, etc.

For tax year 2025, the income threshold is $5 if you are Married Filing Separately.

For taxpayers under age 65 at the end of 2025, the thresholds are:

• $15,750 for Single filers
• $23,625 for Head of Household
• $31,500 for Married Filing Jointly (both spouses under 65)
• $33,100 for Married Filing Jointly (one spouse under 65)

For taxpayers age 65 or older, the thresholds are:

• $17,550 for Single filers
• $26,625 for Head of Household
• $34,700 for Married Filing Jointly (both spouses 65 or older)

Unlike Switzerland, the IRS filing requirements are based strictly on income and not age. Thus, turning 18 does not automatically oblige a child to begin filing a tax return. However, earning income or having ownership of or access to foreign financial accounts may also cause someone below the age of 18 to be obliged to file a tax return or FBAR.

Even if your income from employment is below the exclusion amount of $130,000 for 2022, you must still file a tax return if your total earnings are greater than the income thresholds mentioned above. It is also important to keep in mind that the exclusion applies only to earned income. This means that income from pensions and social security, for example, does not qualify for the exclusion.

The treaty has provisions in place to ensure that taxpayers will not pay tax twice on the same income. However, that does not mean that if you pay Swiss tax on your income you will never pay US tax. For example, if someone pays income tax at a 15% rate in Switzerland and that same income would be taxed at 20% in the US, the difference of 5% will still have to be paid to the US.

Americans and green card holders who have foreign (non-US) bank or financial accounts with an aggregate value of $10,000 or more at any time during the year must file an FBAR to declare their ownership over the accounts. Generally, all bank accounts, securities accounts and 3rd Pillar accounts must be declared. These accounts must be declared even if you own them jointly or only have signatory authority over them. The rules are complex and penalties for non-compliance are severe, beginning at $10,000 per year.

If you or members of your family own or have an ownership interest in a foreign company (such as an AG or GmbH), you may be required to file a Form 5471 Information Return and be taxed on income from the foreign company. Failure to file the form can result in a penalty of $10,000 per year.

If you received a gift or inheritance from a Swiss or other foreign person (non-US citizen or Green-Card holder) or a distribution from a foreign trust of $100,000 or more, you must file Form 3520 Report of Receipt of a Foreign Gift. The amount received is not taxed, but it must be declared. The penalties for failure to file Form 3520 are severe – up to 25% of the amount of the gift or inheritance.

If you are a US taxpayer, you should not own non-US mutual funds, such as Investment fonds, LUX, ETF, SICAV, etc. Under US tax rules such an investment is called a PFIC (Passive Foreign Investment Company). PFICs are subject to a punitive high tax on specially-calculated income and capital gains. Each PFIC you own must be declared separately in a detailed Form 8621 Information Report.