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Old 28.03.2020, 12:00
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SEP IRA (American retirement) Questions

Hi All,

I hope you are doing well in this challenging time! Let's hope that by this time next years there is a vaccine and several good treatments for this nasty plague.

Since I am stuck indoors, I have time to be concerned with far more trivial matters, such as taxation and retirement.

I am a contractor working in Switzerland and a US citizen. This means, as some of you know, that the US will tax me on my earnings for the year 2020.

Stateside, where I have spent the major part of my career, a self employed person can open a SEP-IRA and contribute a lot of income to it, and thereby lower his or her tax bill for that year. (SEP-IRA stands for Self Employed Individual Retirement Account). I had one a few years ago when I was self-employed, a so-called '1099er.'

Would any US person out there who has worked as a contractor in Switzerland know if Switzerland source income is considered as 'self employment income' by the US tax authorities?

I do know that any US person working in Switzerland either as a full time employee or as a contractor can contribute to a normal IRA and shield some Swiss income from US taxation. This amount is between $6000 and $7000, depending on age.

The contribution limits to the SEP-IRA are a lot higher, so the tax savings are higher too. And the additional savings for retirement are great too. None of us are getting younger.

So, if anyone has personal experience with this question or could point me to someone who does have experience, that would be great!

Thanks and stay well!
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Old 28.03.2020, 16:09
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Re: SEP IRA (American retirement) Questions

If you receive an annual Lohnausweis (wage statement), you are considered employed in CH and the IRS would likely see it that way too.

If you are registered as self-employed (Einzelfirma) in CH with a Swiss UID, you would likely use IRS Sch. C to file your US taxes. It should then be possible to contribute to a US SEP-IRA, imo.
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Old 30.03.2020, 21:56
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Re: SEP IRA (American retirement) Questions

Thanks for the reply! I think that I don't qualify as a self-employed person, which is a pity.
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Old 31.03.2020, 17:33
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Re: SEP IRA (American retirement) Questions

You might think of a Roth IRA which you can fully invest in (limit $6 of 7k) if your AGI is that amount or more.
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