Switzerland income

[cpabsd]

I have a client who earned $28 K while residing in Switzerland for 60 days. He had to pay Swiss tax on this money. Is this money taxable to the US? He is a US resident. When looking up the tax treaty, it only appears to cover Swiss residents earning income while in the US.

If the money is taxable to the US, would he receive a foreign tax credit for the tax paid to Switzerland?

Any help is appreciated.

[Catherine]

US citizens are subject to US taxation on worldwide income. Perhaps it can be excluded on Form 2555; perhaps he can get a credit for tax paid via Form 1116, or take a deduction on Schedule A. Look up the various instructions for those forms, and try it all three ways to see what works best for the client (it can vary - and the results can surprise you, too). Just be sure NOT to try to take a credit for taxes paid to Switzerland for income excluded on F2555 - that's double-dipping, and only allowed for Treasury officials and state employees. Even then, it's technically not allowed, but they get away with it all the time so in essence it's the same as allowed.

[Lion EA]

lol

[joanmcq]

60 days is too short for the 2555. You'll use either the foreign tax credit or deduction-most likely the credit.

FWIW, US government employees don't qualify to take the foreign income exclusion.

[Catherine]

Ah, missed the time frame; thanks Joan for the correction.