Your Definitive Guide to Paying Taxes as a U.S. Expatriate in Sweden

Share on facebook
Facebook
Share on google
Google+
Share on twitter
Twitter
Share on linkedin
LinkedIn
Reading Time: 3 minutes

As a US Citizen Living in Sweden, compliance with expat taxes may be hard work. Firstly, because you two deadlines that you must keep track of. And secondly, because losing your focus may leave you open to double taxation! Thirdly, Sweden has one of the highest tax rates, so you’ll want to keep your wits about you!

We can help you by pointing out the following things about expat taxes in the US:

Provisions Preventing Double Taxation

To not pay taxes twice on the same income – in both the US and Sweden – you can begin by declaring which bank accounts you have and where. Then determine if you are entitled to Expat Tax Relief Sweden, such as Foreign Earned Income Exclusion. By applying for it, you won’t have to pay taxes on $105,900 of what you earn.

US expats may also want to check if they qualify for foreign tax credit. It will reduce your tax liability to the US government. The tricky part is that you may be eligible for one of the two!

Don’t forget to see if you also qualify for Foreign Housing Exclusion. It allows a US citizen living in Sweden to separate money for their household expenses before they pay taxes.

Tax Due Date in Sweden

US expats will owe taxes to the Swedish Tax Agency or Skatteverket by May 2nd of the following year. If you have financial assets that are located overseas, you may have to file additional paperwork, such as the FBAR (FinCEN Form 114) and FATCA (Form 8938). 

Moreover, delays can be costly for US expatriates living in Sweden! Delay your Swedish taxes, and you will be paying a 40% penalty on hidden income is 40%. File incorrectly and it will cost you 10%. You already live in a foreign country that is taking more than half of your pay as taxes. Don’t add to it by missing the due date!

Find out about 2020 US tax due dates and worldwide country by country tax deadlines, tax year and extension and 2019 US and worldwide tax due dates. 

The US-Sweden Social Security Agreement

The US and Sweden Tax Treaty determines whether you will be paying taxes to Sweden, the US, or both. Moreover, US expats don’t have to pay social security for the first three years if staying in Sweden temporarily. Again, you will need guidance in finding out whether you qualify for this benefit or not. Usually, not being a Swedish citizen, working for one, or being employed for less than 5 years should do the trick. 

Residency in Sweden

Since the amount you will pay as a US expat in taxes will depend on residency, it is crucial to know how Sweden defines it. Owning a home or regularly staying there for six months makes you a Swedish resident. Leaving the country won’t change your status for at least five years with family or home still within Sweden. 

Income Tax Rates in Sweden

The Tax in Sweden For Foreigners begins after you deduct a basic allowance of 13,400-35,100 Swedish Krona (SEK). For the income tax, the rate is 20% for those who earn SEK 455,300 and 25% for salaries higher than SEK 662,300. 

Besides housing exclusion, you may be entitled to remuneration for expenses concerning moving or schooling. Confirm how much you could receive.

Other Taxes in Sweden

Besides that, you must pay 32.12% as municipal tax. Capital gains are taxed at a flat rate of 30%. A Value Added Tax (VAT) – at a rate of 25% — applies to all goods and services, except for food (12.5%), newspapers (6%), and passenger transport (6%).

Are you Filing US Taxes in Sweden? Did you know that Sweden has no wealth tax? Or inheritance tax? Contact us for important information like this!

Leave a Reply

Your email address will not be published. Required fields are marked *

Client Reviews
AKIF CPA
5.0
Based on 95 reviews
powered by Google
Ammoria Daniels
Ammoria Daniels
02:11 16 Sep 21
We contacted Akif with an urgent matter regarding corporate taxes. Akif immediately understood what was needed and... within days had everything ready to sign. The level of service we received was amazing and unmatched. Waqar expertise in trucking industry made our situation seamless. His communication was outstanding; I heard from him daily and could have been completed sooner if I was as fast as he was 😃 Highly recommended!read more
Joe Paneitz
Joe Paneitz
18:30 18 Aug 21
What an absolute pleasure to work with this CPA firm. My business is already seeing such a positive impact and growth.... I cannot believe I didn't connect with them sooner. This firm is helping in so many ways! 5 stars is an understatement! Thank you so much for your help AKIF CPAread more
Helptest ARCpoint Labs
Helptest ARCpoint Labs
15:02 18 Aug 21
The firm is quick, responsive, and has the latest technological software. Thus far, I have been with them for 3+ years... and will continue to work with them even after relocating. They make it easy even when I'm miles away. Would highly recommend them.read more
Luz Tipaz
Luz Tipaz
16:06 13 Jul 21
Saim and his team are the best CPAs in town. I have been their client for years. All started when I needed help with... company structure with multiple companies and then accounting and Taxes. I have been very happy ever since. Thank you AKIF CPA.read more
Maria perez
Maria perez
18:31 08 Jun 21
Me and my husband have been getting all of our personal Taxes, business Taxes, monthly bookkeeping, accounting and... payroll done with AKIF CPA. Recently, we had more stuff come up and had detailed analysis done on capital gains, single family rentals (SFR) and business disposition. You will only know how great this CPA company is until you have worked with them and given them a chance. Words can’t describe our experience. AKIF CPA gets the job done every time - very reliable, professional and affordable.read more
Afnaan Amin
Afnaan Amin
22:14 02 Jun 21
Very good experience, we had unique situation in regards to cross border income as Canadians currently residing in the... US. Income on both sides of the border through completely different channels. Everything was very easy and completed timely, I also had lots of random questions and Mohammad provided top notch service along the way and even after we finished our taxes!! Highly recommended.read more
Ryan Paton
Ryan Paton
10:56 08 May 21
I moved to the USA from Canada late 2018 as part of a promotion/relocation for work. For my 2019 returns, I used an... accounting firm recommended by the local Canadian social club in my city, which was a terrible experience. They were slow to respond to inquiries and would follow up in piecemeal requests which dragged out my return process over several months, often asking for information I had already provided.For the price I paid, I vowed to find better service. I found Mohammad online and decided to reach out. Mohammad was extremely responsive, took care of my US and Canadian returns as well as my wife's business returns in a timely manner. Overall, it was a very positive experience and I would recommend him to another in my situation.read more
Tuan Vo
Tuan Vo
01:59 20 Apr 21
I relocated to Texas from Alberta, Canada and needed a CPA to help me with my cross-border taxes as I was not happy... with the CPA that I used previously. During my interviewing process to find another CPA, I had good feedback from Mohammad as he was able to answer my questions regarding my unique tax situation with expertise, and importantly to me, in a timely manner. I decided to use his services for the current tax year and I have nothing but compliments for the work Mohammad provided. If you are in need of a professional cross-border CPA, I highly recommend reaching out to Mohammad Akif.read more
See All Reviews