If you are an American expat living in Sweden, then there are some things you must know about filing your taxes. An essential thing to remember is to file your US federal tax return. The US government requires all citizens to file their taxes each year.
Then, you must consider what to do if you owe Swedish taxes.
It is simple to observe what makes Sweden a popular destination for digital nomads and expats. You may love the stunning countryside and endless possibilities for outdoor entertainment. For others, Sweden’s cities’ attractive architecture, history, and luxuries are unimaginable to resist. Sweden retains something for everyone, hugely favored by students, digital nomads, and retirees alike. However, you must make some lifestyle adjustments if you are moving to Sweden from the US. Here are some essential things you must know before you move and how to organize for life as a US expat in Sweden.
Estimates Show Several Thousand Americans Expats Living in Sweden.
A trip to Sweden is an unforgettable experience because it offers many different things: the friendly locals, the public service, the beautiful culture, the accessibility to the rest of Europe, etc. If you want to become an American expat living in Sweden there are some questions you will need to answer like: How do I file a Swedish expat tax return? All American citizens and green card holders must file their tax return with the IRS, whether they reside abroad or have income.
US Federal Tax Return
US-Sweden Totalization Agreement
On January 1, 1987, the United States and Sweden effectively agreed to improve Social Security protection for working or working in both countries. Without the deal, it helps many people who would not be eligible for monthly retirement, disability, or survivor benefits under the Social Security system of one or both countries. It also helps people who would otherwise have to pay Social Security taxes to both countries on the same earnings.
The agreement covers Social Security taxes (including the US Medicare portion) for the United States and Social Security retirement, disability, and survivor’s insurance benefits. It doesn’t cover the US Medicare or Supplemental Security Income (SSI) programs’ benefits.
For Sweden, the agreement applies to retirement, disability, and survivor benefits under Sweden’s primary and supplementary pension programs and to the taxes that must be paid. The deal doesn’t affect benefits or tax liability under other Swedish programs such as health insurance, unemployment insurance, work accident, occupational illness insurance, or family allowance benefits.
Tax Credits
Through the US-Sweden totalization agreement, there is no double taxation of your worldwide income.
How Does Sweden’s Taxes Affect US Expats?
As anAmerican expat living in Sweden must pay taxes. Sweden has an extensive social program. Sweden is, however, one of the world’s top taxes on social services. The Swedish tax law is complex and can sometimes hinder expats from keeping track of their obligations. Therefore, this summarizes how tax laws apply to Swedish expats in the United States.
Swedish Tax Rates
Taxation of non-residents occurs on income sourced within Sweden, including capital gains and pensions. The Swedish tax rate on employment income for non-residents is a flat rate of 25%. On the other hand, Swedish residents’ taxation is a flat rate of 32% of their worldwide income.
For US income earned, the treaty allows Americans in Sweden to claim Swedish tax credits to the worth of the US tax paid on this income. However, they may have to pay some extra Swedish tax, as Swedish tax rates are higher than US rates and do not have double taxation on your income.
Your income tax return for the 2022 income year must be received by the Swedish Tax Agency by May 2, 2023, at the latest. Therefore, you should complete the automatic filing extension if you want to wait to file your US taxes before your Swedish taxes.
Americans living in Sweden must file their tax returns for both countries.
Can American Expats Work in Sweden?
EU nationals moving to Sweden is relatively straightforward. EU residents are entitled to remain in Sweden for an infinite amount of time. These residency rights are outstretched to family members as well. The only accurate paperwork to worry about is registering for a Swedish personal identification number.
The procedure is more problematic for non-EU nationals who want to move to Sweden from the US. Non-Europeans must have a work permit to live in Sweden. To get a work permit, you must first have a job offer.
Getting into Swedish is simple. Currently, EU citizens have an unlimited period on the Swedish island. This residence right extends to a family member. There is only paperwork necessary to register to get Swedish personal identification numbers. This procedure is longer for non-EU citizens, mainly immigrants who emigrated from the USA to Sweden. Non-Europeans need an employment permit if living in Sweden. And to get an employment permit, you need to apply for work.
Finding a Job in Sweden
American Expat living in Sweden finding a job can be challenging. English speakers are already in high supply, and the job market needs to be more stable. Learning Swedish is vital in expanding your network and getting a job offer.
Once you live in Sweden, one of the best places to start your employment search is the Arbetsförmedlingen. The website is equivalent to the Swedish Public Employment Service. The Arbetsförmedlingen operates as a combination of a resource and recruitment center. They provide resume-building and career-planning services to help clients land employment.
Understanding The Work Permit Process
American Expat wanting to live in Sweden need to understand the work permit process. Sweden’s Migration Agency website assists you in getting a work permit. Eligibility for a Swedish work visa means you must be offered a job. Therefore, this must be a genuine offer. Your new employer must advertise the position in Sweden and Europe for at least ten days. Thus, this ensures no one receives special favors or bypasses qualified residents.
Your new employer will provide you with an employment offer that you can give to the Migration Agency. This paperwork includes your email address. Therefore, this allows the Migration Agency to communicate directly with you. You can utilize the online system to confirm your job details and monitor your online processing progress. Should they require additional documentation, you can provide the documents electronically.
The Migration Agency must receive a 2,000 kronor (SEK) for a work visa fee. Any additional family members will cost 500 kronor for children and 1,000 kronor for adults. Once you pay your payments, the authorities will assess your application. The Migration Agency website will give you the approximate waiting time by inputting details such as the visa type and industry.
There are a couple of other fine points to contemplate when applying for a Swedish work permit. You must, of course, maintain a valid passport. Your job proposal must demonstrate you have a salary equivalent to its industry. In other words, these businesses must refrain from exploiting foreign workers. Your employer must also supply prospective employees with health, life, employment, and pension insurance coverage.
Learning the Swedish Language and Culture
A majority of people you encounter in Sweden speak English. However, the level of comprehension will vary. The country currently ranks second in the world. Therefore, they have one of the highest percentages of people who understand English as a second language.
While those traveling to Sweden on holiday will find this great, it is still crucial for new residents to learn Swedish. There is a substantial social expectation that fresh residents will comprehend the language. Furthermore, understanding Swedish is vital for success in the workplace. Therefore, you should decide whether to do this before moving to Sweden.
You will frequently see “SFI” or Swedish For Immigrants classes promoted. Therefore, this is a fantastic way to encounter other expats and value a course tailored for you. Online classes, language apps, and private tutoring (university students are great tutors!) can likewise support your learning of the language.
Families and Children in Sweden
Family lives are a critical Swedish characteristic, and Sweden is an excellent place for raising children. Parents have found their children safe thanks to free, high-quality educational facilities. Sweden is an international leader in liberalism pioneered with LGBT rights, gender equality, and providing parental rights to employees in large proportion.
Cost of Living in Sweden
Sweden is costly to live here, and expats must expect an exceptionally high price of life, particularly in Stockholm. High taxes in Sweden mean wages for foreign workers in Sweden can be modest. However, expats with residency permits have the advantage of a comprehensive state-funded social service covering major expenditures like education and health insurance.
Is Sweden Expensive to Live?
Tourist restaurants and shops are expensive, but the cost of living in Sweden is lower than in 79% of Western European countries. The country’s capital – Stockholm, is undoubtedly the most expensive city. In 2021, the city ranked 72nd out of 209 in the Mercer Cost of Living 2021 study.
The cost of Living in Sweden is relatively similar to living in parts of the United States. It could be more expensive or affordable, depending on where you live in the United States.
Finding A Place To Live
It is achievable to discover a cozy one-bedroom apartment outside Stockholm for about $1,000 (sometimes less if adaptable). But the average cost can be several times that for more significant properties in Stockholm’s more trendy neighborhoods. The rental market favors landlords as there is more demand than supply.
Writing a great, personalized rental application in Swedish will help your chances of securing your dream apartment. While not mandatory, if you supply a copy of your credit report, it will comfort landlords. Consulting a local friend will also benefit. They might have a better understanding of places to check out.
Understanding Sweden’s Healthcare System
Sweden’s public, universal healthcare is one of the best healthcare systems in the world. In general, the system is very affordable. Patients funded through taxes and administered by the federal government pay small co-pays. However, this portion is capped at 1,100 kronor a year. The healthcare system covers the expenses of most prescription drugs, wellness visits, most prescription drugs, wellness visits, preventative care, inpatient and outpatient hospital care, and even pediatric care.
Setting Up Banking and Finances
The easiest way to open a Swedish bank account is to visit a branch in person. Expat life will be much simpler if you have a local bank account. You will need to bring along proof of your identity, proof of employment, proof of your address in Sweden, and proof of residence.
Ultimately, you must prove who you are and where you live, and you possess the legal right to live and work in Sweden.
Many local banks include Skandinaviska Enskilda Banken, Nordea Bank, Svenska Handelsbanken, and Swedbank. Each has pros and cons, like fee schedules, branch locations, and other services. Banking hours in Sweden are still relatively limited, so select a bank near your office to provide convenience.
American Expats Living in Sweden
Moving from the US to Sweden
You could be like many Americans considering moving to Sweden, the Land of the Vikings. The spectacular scenery, fantastic Swedish advantages, and public transport are some of the motivations. Read on to find critical details about moving to Sweden.
Benefits of Moving to Sweden from the US
Healthcare System
If you seek one of the best healthcare systems, you will find top-notch care in Sweden. While it is not entirely free, a mother and child’s health care is free. In addition, they gain free admission to facilities furnished with books and toys. A child allowance of $125 is deposited into their bank accounts to ensure the child’s health.
Quality of Life
They rank above average regarding jobs, earnings, work-life balance, housing, and safety.
Fast Internet
You should not have any issues if you need fast internet for your workspace, as Sweden is the top 10 best internet connections. Internet access is affordable compared to the US and neighboring EU countries.
Best Education
If you have children, then educating your children is of concern. The great news is Sweden has one of the best education systems. Every child obtains free education and must attend nine compulsory years of school. Grundskola is the primary and lower secondary school, while Gymnasieskola is the upper secondary school. You will observe most universities have funding and accessibility to the citizens of Sweden.
Excellent Working Conditions
Sweden has a stable and robust economy. Although the cost of living is relatively high, they have a high income. If you work in IT, business management, engineering, or science, you will have an advantage in earning employment in Sweden. Also, most Swedish speak English, but you are expected to learn the language at least to obtain the best jobs.
How to Move to Sweden from the US?
The Residence Permit Application Process
Americans planning to move to Sweden must obtain a residence permit for over 90 days. You must submit the application form to a Swedish Consulate in the USA.
The prerequisites include two copies of the following documents:
- Fill out the application form
- Notarized copies of the passport and other permits
- Bank statements
- Return ticket
- Application fee
- Confirmation letter from a health insurance company with a minimum of $37,000 coverage
- Additional documents
Apply for a Work Permit
If you possess a work permit, you can also move to Sweden. An official employment proposal from an employer in Sweden and a valid passport are conditions. You must also show you earn a monthly salary of $1300 before taxes.
Submit your complete application online or at the Swedish Consulate in the US. Ensure you submit all the necessary documents, including the application payment.
Becoming a Swedish Citizen
There are qualifications you must have to become a Swedish citizen. First, you must be 18 years old to become a Swedish citizen. Granted, this should qualify you, but some reading this article but citizenship might need to be more straightforward for your younger children. Next, you must prove that you have resided in the country for five years, have permanent residence, and have no criminal record. You will need a valid passport.
Submit your application online or to the Consulate’s office with all the necessary documents.
Cost of Moving from the US to Sweden
The cost of an American expat living in Sweden will be different for every person. Some people will have pets they will want to bring along. Others will want to bring all their family heirlooms. While others want a fresh start and will come over with nothing but what is on their backs.
However, the average cost to move from the US to Sweden is $2750. The cost varies as many factors go into calculating moving costs: the number of belongings, distance, packing and unpacking, extraordinary items, and much more,
Most Popular Areas in Sweden
Stockholm
The largest city in Scandinavia is Stockholm, the capital of Sweden. It’s also one of the most gorgeous cities in the world. Many American expat living in Sweden make Stockholm their home. Although it is a little expensive, the city is home to some of Europe’s best universities. You can find a great job market and exceptional museums. Anticipate observing numerous historical buildings and beautiful public parks.
Malmø
An alternative to Stockholm for an American expat living in Sweden is to make the southern city of Malmo home. Most expats prefer Malmø because they quickly see their diverse culture and community. It is a tech hub for startup companies. You can walk around the city to find the most bizarre yet gorgeous gardens and parks. Throughout the year, you will observe many festivals and outdoor events. Overall, this city has a great atmosphere. They also sell low-rental properties.
Solna
Solna has a calmer feel for an American expat living in Sweden, is close to Stockholm, and was voted one of the best cities in Sweden. They possess a healthy job market and low corporate taxes, which makes them ideal for startups and investors. If you are making a scouting trip, check out the Angso National Park and the Ulriksdal Palace.
Helsingborg
Fundamental properties in Helsingborg are affordable. There are many offerings of rental homes at low prices. People live in this city to enjoy a good quality of life. An American expat living in Sweden has other qualities besides affordable living for a good quality of life. There are a couple of great theatres, golf courses, restaurants, and museums to occupy your time.
Uppsala
If you want to study in Sweden, consider Uppsala University, as it is one of the best universities in the world. The city has excellent nightlife and a peaceful atmosphere. You can enjoy the waterways by going on yacht tours or getting out on a kayak.
Marstrand
Some compare Marstrand to Swedish Hollywood. There are several tourist locations, theatres, buildings, and historical museums. The city is only a few minutes away from Gothenburg.
Visby
The prices for groceries are slightly higher in Visby, but the rental cost is much more affordable than in other cities in Sweden. This exciting city has an extensive Viking history. You will observe several historic buildings and tourist spots in Visby.
Sundsvall
Also referred to as Stone City, Sundsvall offers plenty for expats. Stone buildings, wide boulevards, and restaurants offer outstanding cuisine. There are plenty of cozy bars if you want to go out later. It’s a cosmopolitan city with a beautifully rebuilt infrastructure.
Atypical Last Thoughts
Consider this Northern European nation if you want to live near the Arctic Circle. Expat living can be great for residents and non-residents. However, to live in Sweden, you must find answers to paying expat taxes.
American Expat Living in SwedenWhen moving to Sweden, you will want to consider how the move will affect your family life. The hardest part of beginning the journey to expat life is how you will pay to live in the country. Foreigners can work here as they spend their money on the local economy. Swedes benefit from expats consuming their goods. The tax on these goods also helps pay for social programs.
Tax treaties between the US and Sweden prevent you from having double taxation. You should consult an accountant to file your Swedish taxes to ensure you receive all the available tax credits.
Now you should have an idea about living in Europe. All you need to do is make friends. If you want to learn more about living abroad, continue reading more about my journeys as an expat.
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