As an American living in Denmark, you’re likely aware that you still need to file a US tax return each year, even if you’re fully taxed by the Danish government. One of the most helpful documents you’ll need for your US filing is your Årsopgørelse, Denmark’s annual tax statement.
In this article, we’ll walk through the key information from the Årsopgørelse that you should review and gather to complete your US tax return accurately. We’ll also explain how this Danish tax summary helps you claim tax credits, avoid double taxation, and comply with both Danish and US tax laws.
What is the Årsopgørelse?
The Årsopgørelse is your annual tax assessment issued by SKAT (the Danish Tax Agency). It summarizes your income, deductions, taxes paid, and any balance owed or refund due for the previous calendar year.
The Årsopgørelse is typically available in March, and you can access it online via skat.dk using your MitID.
For US expats, this document is crucial—it serves as official proof of your Danish income and taxes paid, which you’ll need for reporting to the IRS.
Why the Årsopgørelse Matters for US Taxes?
As a US citizen or green card holder, you’re required to file a US tax return regardless of where you live. You must report worldwide income, including what you earn in Denmark.
The Årsopgørelse helps with:
- Calculating your total foreign income
- Reporting foreign tax payments
- Claiming the Foreign Tax Credit (Form 1116) or Foreign Earned Income Exclusion (Form 2555)
- Providing support for IRS documentation if requested
Key Årsopgørelse Sections for US Expats
Here are the specific items on the Årsopgørelse that US expats should pay attention to:
1. Total Income Earned (Indkomst)
Check the “Lønindkomst” (salary income) section. This includes wages from Danish employers. Also look for B-indkomst, which may reflect freelance or self-employed income.
This amount should be converted to USD (using the yearly average exchange rate) and reported on your Form 1040.
If you qualify, it may also go on Form 2555 for the Foreign Earned Income Exclusion.
2. Danish Taxes Paid
Look for the total income tax paid under:
- “Trækprocent og skat”
- “AM-bidrag” (Labor Market Contribution)
- Municipal and state tax sections
Only income-based taxes count toward the Foreign Tax Credit. These totals are reported on Form 1116 to offset your US tax liability.
Note: Not all contributions shown on the Årsopgørelse qualify as creditable taxes. For example, pension contributions (ATP) may not be creditable unless tied directly to income.
3. Foreign Employer or Income Sources
If you’re claiming the Foreign Tax Credit, the IRS requires details about where your foreign income came from. Keep track of:
- Employer name and address (if in Denmark)
- Type of income (employment, freelance, investment, etc.)
4. Refunds or Additional Tax Due
At the bottom of your Årsopgørelse, you’ll see whether you’re receiving a refund or need to pay more Danish tax. This doesn’t always affect your US return directly, but it helps confirm if your Danish tax liability changed after the year ended.
5. Foreign Bank Interest or Investments
If your Årsopgørelse includes interest income (renteindtægter) or dividends, these must also be reported on your US tax return—even if the amounts are small.
Additionally, if you have more than $10,000 in foreign accounts at any time during the year, you may need to file the FBAR (FinCEN Form 114) separately.
Tips for Using the Årsopgørelse in US Tax Filing
- Download a PDF copy of your Årsopgørelse from SKAT for your records and share it with your US tax preparer.
- Use the IRS yearly average exchange rate to convert your Danish income to USD.
- Double-check if you also received income outside of Denmark that’s not listed in your Årsopgørelse.
- If you’re self-employed in Denmark, you’ll likely have additional reporting requirements, including potential self-employment tax obligations in the US.
What if your Årsopgørelse is Incorrect?
If your Årsopgørelse contains errors, such as missing income or incorrect tax amounts, you can correct it on skat.dk through “Ret årsopgørelsen” (Amend your annual tax return). It’s important to make any necessary updates before using it for US reporting, since IRS figures must be accurate.
Handling Tax Year Mismatches Between Denmark and the US
One challenge that often confuses US expats in Denmark is the difference in how and when taxes are assessed and paid. While both the US and Denmark use the calendar year for income reporting, taxes in Denmark are often withheld at source and finalized in the Årsopgørelse issued the following spring.
This timing difference can create complications when claiming the Foreign Tax Credit on your US tax return. The IRS only allows you to claim a credit for foreign taxes that are paid or accrued during the year you’re filing for. If you haven’t paid your Danish tax yet by the time your US return is due, you may have to wait and claim the credit in the following year (on an amended return or using the accrual method).
To stay compliant:
- Try to align your tax reporting on a paid basis when possible, using the taxes shown as “paid” in your Årsopgørelse.
- If you’re accruing taxes, make sure you use the accrual method consistently and keep good documentation.
- Work with a tax professional familiar with both US and Danish systems to time your credits correctly and avoid losing deductions.
Properly handling this timing issue can help you avoid unnecessary double taxation or IRS scrutiny.
Need Help with Both Danish and US Taxes?
At Universal Tax Professionals, we specialize in helping Americans living in Denmark file their US tax returns correctly and on time. We know how to read the Årsopgørelse and use it to your benefit, whether you’re claiming the Foreign Tax Credit, using the Foreign Earned Income Exclusion, or both.
We also work with local Danish accountants if you need support on both sides.
The Årsopgørelse is more than just a Danish tax summary, it’s a key tool for ensuring your US tax return is accurate and optimized. By knowing which figures to extract and how they apply to your US filing, you can reduce your risk of double taxation and avoid costly mistakes.
