Taxes on US Retirement

Hugh T. · #1 (**permalink**) 13th February 2008, 05:58 PM

I am an Australian citizen working in the USA. Will be retiring from my current position here in the US shortly and would like to go home. How does the tax on my US retirement income work? Thanks

kaz101 · #2 (**permalink**) 13th February 2008, 07:44 PM

Hi Hugh,

Welcome to the forum.

Have you checked out the Australian tax office links in the "PLEASE READ..." post towards the top of the forum? That may have some information for you but you will probably need specialist advice.

Regards,
Karen

Hugh T. · #3 (**permalink**) 13th February 2008, 08:36 PM

Thanks Kaz. great site. I was hoping someone may have been down that road. My understanding is the agreement is no double taxation, but how that works is my problem. Will check the links. Hugh T.

kaz101 · #4 (**permalink**) 13th February 2008, 10:00 PM

Hi Hugh,

In the UK we had to fill in forms so that we don't pay tax in the UK on any bank accounts or UK rental income, but that income will be entered into our Australian tax returns so that we pay the tax on it here. That's how we've been told it will work for us but we haven't been here long enough to fill in a resident tax return yet.

Not sure if it will work in a similar way in the USA.

Regards,
Karen

Bevdeforges · #5 (**permalink**) 13th February 2008, 10:26 PM

Hi Hugh,
I see you've already determined that there is a tax treaty between the US and Australia. Unfortunately, the US is not like the UK (or most other civilized countries) when it comes to taxes.

It depends a bit on what sort of retirement income you'll have exactly how the taxes work. As long as you hold a green card, you are expected to file US tax returns, even if you don't owe any taxes. Once you give up the green card, you file as a "non-resident" on US source income - which includes your US social security plus any private pension plans or retirement funds (401Ks or IRAs).

You may want to check with either the IRS website or with the US Consulate in Australia, which should have information specific to the US-Australia social security treaty and just how that works.
Cheers,
Bev

kaz101 · #6 (**permalink**) 13th February 2008, 10:32 PM

Quote:

Originally Posted by Bevdeforges

you are expected to file US tax returns, even if you don't owe any taxes.

I should have that we have to do that in the UK too - file a tax return but I think that's because we will still be earning money there although we won't be paying tax on it.

Wow so the UK is civilised - I can think of people who would disagree

Regards,
Karen