brokenhearted.

Oh joy of joys ...we are nearly at the end of the US tax year and I have got my best worry wart head on!

Well,,, I am less in panic mode than i was this time last year. I bit the bullet and got a uk/us tax accountant ( very spendy) but in all honesty it was something well beyond me at that time. We have tentatively spoken about the exit procedures though he assures me that despite being back for over a year I have not triggered anything that would force a filing of the 8854 paperwork. We have agreed to look at what the numbers look like on paper to see what kind of damage filing 8854 would bring.

My personal concern is the valuation on the survivor annuity that I receive. I see a lot about the deferred annuity/pensions but i cannot see how the IRS wants people who are already receiving distributions to value them or I may have missed it?. At 56 this valuation may hurt ! Most of my money is tied into 3 IRA's ....one Roth but I am not old enough to draw on them to bring my net worth down for a couple of more years - I did see a strategy that suggest sucking up the costs involved with tax returns to both uk and usa until such a time as the assets can be drawn on and be under the 2 million threshold.

Anyhow - in the mean time I have been reading the tax stuff and wonder if anyone could confirm that any money I have paid HMCR this year can be credited to the us tax return....I fear that I have not paid enough US tax but I am hoping that any outstanding monies owed to the US will be negated by the application of the monies I have given HMCR by virtue of a credit. I hope that makes sense.... i guess what i am saying is as long as I pay HMCR the equivalent of what the US tax bill is I will be ok.

brokenhearted.

OK....after poking around I think I have some idea about the way a annuity/pension is taxed if it is not deferred - ie in payout mode. Everything I can find seems to suggest it is taxed as regular income. I dont thin it goes on the balance sheet but does go on the tax return as income. I am referring to a qualified plan (in my case federal survivor annuity ) which would be taxed after expatriation just as a NRA would be taxed 30% withholding. If i can avoid being a covered expat I should be able to use the tax treaty to get it back if covered then it is being taxed correctly.

I will have to check with tax guy but I feel really dense now!