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Discussion Starter · #1 ·
asking for a friend who is waiting for internet.He receives a pension? from the company he worked for .Its actually a pre-pension as when he turns 65 this stops and he get his pension from the dutch and his employer.We are trying to figure out how he reports this on the 1040.
We know to put it on line 16a but we can't figure out what the taxable amount is.
Found out in Pub 54 that pensions are considered unearned income so he can't use the FEIE.
So is he stuck with the whole tax burden?
He pays37.5% tax on this pension.
Can he use the tax credit to lower his tax burden?
What he is getting is like a salary and he stays home to get it.
Its kind of confusing to explain what it actually is.
Can he just claim it as income?
Any help solving this would be greatly appreciated.

Thanks in advance for the help.

Bernie
 

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Discussion Starter · #2 ·
forgot to add he is married to a dutch national who works and has no income from the states .How would he file.

Bernie


asking for a friend who is waiting for internet.He receives a pension? from the company he worked for .Its actually a pre-pension as when he turns 65 this stops and he get his pension from the dutch and his employer.We are trying to figure out how he reports this on the 1040.
We know to put it on line 16a but we can't figure out what the taxable amount is.
Found out in Pub 54 that pensions are considered unearned income so he can't use the FEIE.
So is he stuck with the whole tax burden?
He pays37.5% tax on this pension.
Can he use the tax credit to lower his tax burden?
What he is getting is like a salary and he stays home to get it.
Its kind of confusing to explain what it actually is.
Can he just claim it as income?
Any help solving this would be greatly appreciated.

Thanks in advance for the help.

Bernie
 

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51,368 Posts
Easy question first: assuming he is a US citizen (and that's why he's filing in the first place) and married to a non-US citizen with no US tax filing obligation, then he files as "married, filing separately." Where it asks on the form for "spouse's name" and/or "spouse's social security number" just enter "NRA" (Non-Resident Alien).

The pension is a bit trickier, but yes, you report it on line 16 with the full amount as taxable.

You calculate whatever tax the US wants to claim (when added together with any other income from investments or whatever) and then you fill out a form 1116, claiming the foreign tax credit paid on the pension against whatever taxes Uncle Sam is claiming. Unless he has a rather large overall income, his credit for taxes paid in the Netherlands should cancel out anything due to the IRS.
Cheers,
Bev
 

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Discussion Starter · #4 ·
thanks for the info.He will have to pay as he also has his mil.pension and this year everyone got paid an extra month which makes the tax burden higher.we just took the tax he paid here and put it on the form to see so we know he'll have to pay we just have to get the 1116 filled out right.
On the 1040 line 16 you have section a for the amount and b for taxable amount.Would he qualify for this.
Being he has 2 pensions should he add them together for 16b.

Thanks for your reply.

Bernie





Easy question first: assuming he is a US citizen (and that's why he's filing in the first place) and married to a non-US citizen with no US tax filing obligation, then he files as "married, filing separately." Where it asks on the form for "spouse's name" and/or "spouse's social security number" just enter "NRA" (Non-Resident Alien).

The pension is a bit trickier, but yes, you report it on line 16 with the full amount as taxable.

You calculate whatever tax the US wants to claim (when added together with any other income from investments or whatever) and then you fill out a form 1116, claiming the foreign tax credit paid on the pension against whatever taxes Uncle Sam is claiming. Unless he has a rather large overall income, his credit for taxes paid in the Netherlands should cancel out anything due to the IRS.
Cheers,
Bev
 
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