Taxes

[Sono]

Hi,
Don't know if anyone knows about the following??
If I am making money in Australia, being paid in Australian dollars, paying Australian taxes, do I still have to pay US taxes/social security? Also if we don't live in the US and become permanent residence of OZ, can we still collect future social security in the US at retirement???

[amaslam]

Hi Sono:

Do some searches as this has been brought up before.

***
Bottom line:
1. You must continue to FILE Federal US tax returns every year for life
2. Depending on your taxable income you MAY be liable for US taxes

The US considers all worldwide income, so even if you earn in AU it's counted.

The IRS has a booklet that explains this.
Publication 54 (2008), Tax Guide for U.S. Citizens and Resident Aliens Abroad

Read this booklet and then you'll get a better idea. For your first year I highly recommend a tax agent, I used H&R Block in AU.

About Social Security you're still eligible to receive it. You should look up SS agreements as there is one between AU and US.
http://www.ssa.gov/international/Agr.../austrlia.html

Good luck

Originally Posted by Sono

Hi,
Don't know if anyone knows about the following??
If I am making money in Australia, being paid in Australian dollars, paying Australian taxes, do I still have to pay US taxes/social security? Also if we don't live in the US and become permanent residence of OZ, can we still collect future social security in the US at retirement???

[Bevdeforges]

Just to add a bit to what amaslam has already said -

As a US citizen (or so I assume) you always have to file US taxes if your worldwide income exceeds the filing thresholds. You are entitled to the overseas earned income exclusion (taken on form 2555) once you have lived outside the US for a full year (calendar year or 12 consecutive months). Any income not covered by the exclusion is taxable, but you can take tax credits for Australian taxes paid - so in theory you won't be taxed twice.

Your ability to collect US social security depends on how many quarters you have paid into the system. Obviously, if you're not paying in while you're working in Australia, you don't get to count those quarters toward qualification for benefits. But, depending on the social security treaty between the US and Australia, there may be some adjustment of your qualifying quarters as you approach retirement age.

Oh yes, the good news is that, if you're filing from overseas, you get an automatic extension of the time to file until June 15th each year. The first year is tricky, given that you normally have to file for extensions until you have your one solid year of residence., but after that things get much easier.
Cheers,
Bev

[Sono]

Wonderful info!! Thank you to both for your help. I will check out the links suggested.