This is a difficult matter for capital gains of only $1000. To answer your question, you need to first understand whether you are a tax resident in Germany and/or in the USA in 2023. You can be a tax resident in several countries in the same year. In that case, you need to pay taxes in all of these countries. For the US and Germany, we have a double taxation treaty which is good for you because you do not pay taxes on the same income two times. But you might still need to declare your income in both countries.
I simply don't know if you are considered a tax resident of the US. For sure your employer paid some taxes for your internship (if it was a paid internship), but this does not necessarily mean you are considered a US tax resident.
In Germany you are a tax resident if you have access (=a key) to an apartment. That's the most prominent reason to be a tax resident in Germany. Even if the key is for your parents house (which is in Germany but not owned by you), you would be considered a tax resident of Germany in 2023.
If you lived in Germany in 2023 before or after your US internship, chances are high that you are a full tax resident in Germany in 2023.
In Germany 2023, if your earn more than 10.908 Euro you pay taxes on every additional Euro. This includes your capital gains as well as your US internship salary. However, you can earn 1.000 Euro from capital gains which are not taxed (“Sparerfreibetrag 2023”).
But before we go down that road, let's look at your capital gains. Capital gains are:
- Interest and Dividends paid to you.
- Stock price increases that you realize. That is, you sell the stock to take the profit (or loss). If your Tesla stock doubles but you don't sell it, you have zero taxable capital gains. From your question I understand you only plan to sell in the future? Then you did not realize your capital gains. Of course, realized profits from stock price changes can be offset with realized losses from stock price changes.
Some tax deductions does your broker for you. However, when you have several tax residencies there is a good chance that these deductions are incorrect (i.e., too high or too low).
Two more things: First, if you forget to update your tax residency with your broker they will not be able to do the right thing. Second, a German broker will apply German tax rules on Germany tax residents and German non-tax residents. But the German broker will not apply US tax rules to a US tax residents. Of course, this is true vice versa!
So, what can you do?
- Try to get rough idea what capital gains and other income you actually have in 2023.
- Check your brokers receipts and try to understand what taxes they already deducted, if any.
- Consider the 10.900 Euro free of tax in Germany and try to understand if you paid too many taxes on your dividends and if you might get some money back. Probably, the opposite situation – you paid too little taxes - does not apply with your capital gains. But I am not a tax adviser and I do not know the details of your situation.
- If you believe you overpaid taxes, decide if you want to take the effort to get your money back by filling the tax returns yourself. Maybe it is not worth the Dollar/Euro amount. However, it is a great learning experience for a young person like yourself. Particular if you plan a career in business/law/engineering or just want an international lifestyle.
For Canada, the same applies analogously. After internships in US, Canada, and living in Germany you can tell a lot about the ‘ease of doing business’ in different countries in the world which can be a game changer for you.
Good luck!
