This might be too arcane for this forum, but I thought I'd give you all a go since clarification on this topic has been hard to come by.
Background: We are married US expats living in Australia as a permanent residents (just applied for citizenship... woohoo!). My partner in a physician - so a high wage earner, while I am a stay at home carer. We pay lots of Australian tax on my partners earnings, which completely offsets our US tax (we file every year and pay zero US tax). We are now finally starting to accumulate enough to start investing in Australia.
Since Australia treats married couples as individuals for tax purposes and does not differentiate between earned and unearned income, and since Australia allows you to make $18,200/year before any taxes are due... we are thinking that we should open a brokerage account in my name (I am the one with no income) rather than opening a super for me - since a super charges 15% on earnings and has rules about withdrawals.
Finally to the question: How will the US treat my unearned Australian income?
When I experimented with TurboTax - it looked like there would be a 3.8% tax on the earnings due to the Obamacare Tax (yep, so even though we get Australian Medicare and don't pay US Social Security -we now make enough to hit the $250,000 USD threshold for the "Net Investment Income Tax") ... does any of this sound correct to you? Thoughts? Recommendations?
Cheers everyone
Background: We are married US expats living in Australia as a permanent residents (just applied for citizenship... woohoo!). My partner in a physician - so a high wage earner, while I am a stay at home carer. We pay lots of Australian tax on my partners earnings, which completely offsets our US tax (we file every year and pay zero US tax). We are now finally starting to accumulate enough to start investing in Australia.
Since Australia treats married couples as individuals for tax purposes and does not differentiate between earned and unearned income, and since Australia allows you to make $18,200/year before any taxes are due... we are thinking that we should open a brokerage account in my name (I am the one with no income) rather than opening a super for me - since a super charges 15% on earnings and has rules about withdrawals.
Finally to the question: How will the US treat my unearned Australian income?
When I experimented with TurboTax - it looked like there would be a 3.8% tax on the earnings due to the Obamacare Tax (yep, so even though we get Australian Medicare and don't pay US Social Security -we now make enough to hit the $250,000 USD threshold for the "Net Investment Income Tax") ... does any of this sound correct to you? Thoughts? Recommendations?
Cheers everyone