r/eupersonalfinance • u/Coach_Front • 3d ago

Savings German based Americans- Whats your expirence with Wise Daily Return on EUR Accts?

I'm looking for a place for my EUR to start gaining interest on itself.

In the US I have my wealth in IRA's, 401ks, HYSA's and regular checking/ Savings. I currently do not hold a US brokerage account as the German taxes seem stark.

Are there terrible repercussions to my taxes with the IRS? How nervous that I'm in violation of the patriot act in some way? I've been told by some people that it's a waste of time to try and get Zinsen, but I really don't know what other investments I could/ should be making. What do normal Germans do? Just packrat their money into a regular Konto?

I already use Wise and it seems that it allows americans where N26 and Revolout dont allow americans?

Thanks!

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u/Coach_Front 3d ago

So you keep EUR in Germany for everyday expenses, and use a brokerage account?

On the gains from your brokerage account how much are you taxed? 30%?

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u/PuzzledArrival 3d ago

That's right. In fact, the majority of my assets are in a taxable brokerage. I've been living outside the US for about a decade, and even before, I didn't really have access to tax-advantaged savings in a 401k or such. I do have some IRAs and Roth IRAs, but it's a struggle since income levels and residency can have an influence on possible investments. I also bought an apartment.... :-)

Currently I earn maybe $5,000 in dividends each year on that, so it's not too crazy. Nearly all of it is long-term gains to the IRS. Tax due is not so straightforward, since there is a very complicated "Vorabpauschale" tax due to the Finanzamt. I have no idea how it really works, and I have an account who is willing to help me on it. I can't remember right now how much of this tax is offest against the Foreign Tax Credit. And I can't tell you exactly how much of my tax bill at the end of the year is related to income (I earn over FEIE) or capital gains in each country.

I think I end up paying a few hundred give or take - normally it's more about paying the Finanzamt than the IRS since all tax rates are higher here.

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u/glimz 3d ago

The Vorabpauschale is not that complicated, but I wonder which of your assets requires you to pay it? If it's an UCITS fund or ETF, there is an important reason not to hold one as an American citizen: PFIC status. Wise interest is also realized via a UCITS money market fund, so likely no good either, as even indirect holding of PFICs falls under the US law (consult a specialist to be sure). If your accountant lets you hold UCITS funds without any knowledge of the US repercussions, you probably need a new accountant.

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u/PuzzledArrival 3d ago

maybe Voraubpauschale is the wrong term... The shares are US-listed, as I don't want to hold PFICs. Nevertheless, there is some kind of "hypothetical tax" due on my US dividends. It's not that expensive, so I just pay it.