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Old 11.03.2013, 13:50
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Leaving CH, pension cash out options

hi there,

im leaving for the US and my employer, one of the big banks, has offered to convert my pension into cash and just drop it into my personal account. while the ease of this is impressive, the tax alarms are going off. the other option is to put it into some swiss 2nd pillar scheme.

i have spoken to a few people about this and results have been mixed. it would seem to me that the CH authorities would then regard this as straight up income and tax it like regular income.

my question is more about the US tax authorities. while my contributions to the pension i believe have been taxed already, im wondering how to account for the employer matching contribution and what that would mean.

anyone have any ideas?
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Old 11.03.2013, 14:34
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Re: Leaving CH, pension cash out options

According to many sources you should have been reporting your employer's contribution all along as well as the interest that was earned each year. The bad news is that you could not have used the FEIE to exclude that income, the good news is, you could have taken that entire pension now tax free.

I only found out about this little IRS quirk this year
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Old 11.03.2013, 14:46
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Re: Leaving CH, pension cash out options

I wouldn't worry too much about the Swiss side. Ask your employer to put the money into a "Freizügikeitskonto". There are no tax implications for doing this. Once you leave Switzerland, you can take the money out of this account and they will charge you source tax. (which is quite low) Mkae sure this account is in a low tax canton like Zug or Schwyz to benefit from the lowest tax rate.
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Old 23.07.2013, 20:16
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Re: Leaving CH, pension cash out options

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hi there,

im leaving for the US and my employer, one of the big banks, has offered to convert my pension into cash and just drop it into my personal account. while the ease of this is impressive, the tax alarms are going off. the other option is to put it into some swiss 2nd pillar scheme.

i have spoken to a few people about this and results have been mixed. it would seem to me that the CH authorities would then regard this as straight up income and tax it like regular income.

my question is more about the US tax authorities. while my contributions to the pension i believe have been taxed already, im wondering how to account for the employer matching contribution and what that would mean.

anyone have any ideas?
Hi, did you ever get this figured out? I'm also going back to the US, and it seems like the only way to keep the money in my second pillar is going to be to cash it out. Do you know what the tax ramifications are here/in the US? I can't get a hold of the IRS (either get hung up on by an automated system, or am on hold forever), and my company isn't being very helpful either.

Can't seem to find a straight answer anywhere.

Thanks for any insight you may have.
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