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Old 16.11.2014, 13:38
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Re: US Social Security and US Pension Taxation

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I've been claiming US-sourced income tax treaty benefits exactly like that although admittedly not for pensions - declare the income on the 1040 and then deduct it right off again using the tax treaty as the reason. Never heard a peep after the refund check came through.
Glad to hear that - have you done if for a number of years? I can see that the IRS FTC form 1116 has a box "d" to check "certain income resourced by treaty" so I think that is how to do the FTC. But really wasn't sure about the income exclusion. Did you include form 8833 each year you filed?

The Big 8 accountants were not much help - outsourced staff too junior to know about US tax treaties.
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Old 16.11.2014, 13:49
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Re: US Social Security and US Pension Taxation

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Felix Cloudy--

That is interesting. I talked with my Gemeinde and they said that if I could show that my pension income was derived as the result of employment from a public institution (like the US Government), it would be excluded from Swiss tax. This is good for me, as I worked for the US DOE in my previous life.

I never heard of the US pension income not being taxed in the US, if it is being taxed in Switzerland. But I will look into it. For the last 6 years, I have paid US federal tax on my US pension income. Please let me know how you make out.
Aklein - I believe you have done it correctly, as your pension is a gov't pension, and your Gemeinde just needs proof of that. The Swiiss accountants we used were clear - the Swiss DO NOT tax government pensons - but DO tax private corporate pensions. Thus the IRS told us to exclude the private pension by listing it on the 1040, and then deducting it on line 21 citing the treaty. Hope it's right. You might want to look at this part of the treaty in your situation:
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Pensions in respect of government service are not covered by this paragraph. They are covered either by paragraph 2 of Article 19 (Government Service and Social Security) or, if they are in the form of social security benefits, paragraph 4 of Article 19.

Last edited by FelixCloudy; 16.11.2014 at 14:01.
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  #23  
Old 29.08.2015, 14:36
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Re: US Social Security and US Pension Taxation

Update on this issue - the IRS sent us a notice on our 2013 return re the way we filed pension income - PER THEIR INSTRUCTIONS! This department claim the savings clause applies - contradicting the IRS CSR unit in Philly AND our accountant. This memorandum explains...

http://www.irs.gov/pub/lanoa/pmta_2010-02.pdf

My accountant is pushing back.. but we expect them to lose and have to revise the return. Live and learn...
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Old 20.02.2016, 11:46
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Re: US Social Security and US Pension Taxation

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Update on this issue - the IRS sent us a notice on our 2013 return re the way we filed pension income - PER THEIR INSTRUCTIONS! This department claim the savings clause applies - contradicting the IRS CSR unit in Philly AND our accountant. This memorandum explains...

http://www.irs.gov/pub/lanoa/pmta_2010-02.pdf

My accountant is pushing back.. but we expect them to lose and have to revise the return. Live and learn...
Really? Seems that after paying and filing US taxes for 40 plus years, that there might be some post retirement benefits. At least some simplication.

The memo you received is a stock reply dated 2010. Any updates?

bill
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Old 20.02.2016, 23:06
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Re: US Social Security and US Pension Taxation

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Really? Seems that after paying and filing US taxes for 40 plus years, that there might be some post retirement benefits. At least some simplication.

The memo you received is a stock reply dated 2010. Any updates?

bill
Sadly, simplification and the Internal Revenue Code don't go together. Never have and never will.
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