2nd pillar U.S. taxation question

Finance, Taxes, Banking, Insurance and Retirement
41
Another dumb questions....since the USA has a social security tax agreement with Switzerland; can we subtract our contributions to the AHV (Pillar 1) from the Gross income?

42
Have you read the agreement, http://www.ssa.gov/international/Agr.../switzrld.html , all it does is specifiy that you would not contribute to two SS arrangments at the same time, and clarifies a few things on qualifying for benefits. Assuming you are only covered in Swiss pillar I, it would do nothing for you.

Actually in 50 years when you retire, you would likely be in a much worse US tax situation as you won't be 'earning' and the FE(earned)IE would not be applicable. That is why for US persons, when they retire abroad it can be quite prohibitive.

You can offset certain parts of pension income if they have already been taxed, but it is important to keep detailed records of employee contributions, employer contributions, and interest growth. Generally only part of this would have been already taxed, assuming you filed it correctly, so you may still have a large tax bill in retirement.

43
A married person cannot file as head of household unless he has lived apart from his spouse for more than six months, or was legally separated or divorced before the last day of the year.

44
Well I certainly file and qualify as head of household, and do not live apart from my spouse. The key is having a qualifying dependent, other than spouse, which I have.

From http://www.irs.gov/publications/p501...link1000220775

"You may be able to file as head of household if you meet all the following requirements. You are unmarried or “considered unmarried” on the last day of the year. You paid more than half the cost of keeping up a home for the year. A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the “qualifying person” is your dependent parent, he or she does not have to live with you. See Special rule for parent , later, under Qualifying Person ."

" Nonresident alien spouse. You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien. However, your spouse is not a qualifying person for head of household purposes. You must have another qualifying person and meet the other tests to be eligible to file as a head of household."

45
Yes you can, I see this all the time, where people are filing MFS because not wanting to elect spouse to MFJ as non US.

Details here

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46
alas this link is broken...

47
Was not at time of posting.

But here you go

http://www.irs.gov/Individuals/Inter...ns-and-Answers

48
Alas, a moot point as I have no kids. It seems every single tax rule was designed to punish my tax situation

49
Now you know why celebrities like Madonna buy more kids from Africa

50
The employer contributions to pillar 2 that I put as extra income not excluded by the FEIE; am I eligible to put that into an IRA if I would choose so?

51
Or, rephrased: it seems that every single tax rule was designed to encourage Americans living abroad to dump ther US passport the minute they receive a better passport.

52
There seems to be a consensus that employer pension contributions can not be excluded by the FEIE. If this is so, in which form/line do these contributions belong? I thought it fell in line 7 of f1040, but it is then excluded by the FEIE. It doesn't seem to fall under any of the other lines or forms

53
Hi all

I have related question. Searched the forums and lot more but haven't found answer so far.

I'm citizen of Belarus. I was Swiss resident in Sep 2010-Aug 2012 when I was paying Pillar 1 & 2 contributions. Then moved to Belarus. I withdrew Swiss pensions: Pillar 1 (CHF ~3.5k) and Pillar 2a (CHF ~30k) in March 2013 (tax paid to Switzerland). In Oct 2013 moved to California and have an option to be a full year resident (H1B + first year choice). This is beneficial to me (family, 2 kids, standard deductions, lower tax brackets when Married Filed Jointly) if I don't have to pay taxes for Swiss pensions in US.

If I execute First Year Choice to be a full year resident + filing married jointly in 2013, how these pensions are taxed on federal and CA state return?

I see englishforums mostly agree this is a non-qualified plan and tax to US need to be paid on contributions, but should it be also paid on withdrawal? My current tax advisor said whole amount is taxable as income in this case, but he may be not experienced with Swiss case.

Does someone know the answer or can recommend advisor who knows it?

Thanks