New pension recipient and very confused.
Feb 16th 2020, 12:15 am
#1
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Joined: Feb 2020
Posts: 4
New pension recipient and very confused.
Hi everyone, newbie here. Sorry if this question has been answered already but I really need help.
So...I’m 58, a green card holder here since 2011, and as of August 2019 in receipt of a monthly local authority occupational pension from when I lived and worked in the UK.
I have this monthly pension paid into my UK bank account, and either transfer it over to my US bank or keep it in the UK for when I go
back to visit. It’s only a modest amount, about £360 a month, and the lump sum that went along with it was £16,000.
Now, I’ve looked at the US/UK tax treaty and can’t make head nor tail of it. I think the lump sum may or may not be taxable, but I assume that this year my husband and I will have to file our taxes on paper instead of online, because where do I put the UK pension on the 1040?
As it’s a local authority pension is that counted as a government pension? If it is, or not, does a green card holder pay tax or would that be only if I was a citizen? Is there state tax as well?
I’m so sorry about the rambling, I said I was confused!! I have however been made aware of filing the FBAR for this year.
Thanks in advance.
So...I’m 58, a green card holder here since 2011, and as of August 2019 in receipt of a monthly local authority occupational pension from when I lived and worked in the UK.
I have this monthly pension paid into my UK bank account, and either transfer it over to my US bank or keep it in the UK for when I go
back to visit. It’s only a modest amount, about £360 a month, and the lump sum that went along with it was £16,000.
Now, I’ve looked at the US/UK tax treaty and can’t make head nor tail of it. I think the lump sum may or may not be taxable, but I assume that this year my husband and I will have to file our taxes on paper instead of online, because where do I put the UK pension on the 1040?
As it’s a local authority pension is that counted as a government pension? If it is, or not, does a green card holder pay tax or would that be only if I was a citizen? Is there state tax as well?
I’m so sorry about the rambling, I said I was confused!! I have however been made aware of filing the FBAR for this year.
Thanks in advance.
Last edited by ConfusedinOklahoma; Feb 16th 2020 at 12:17 am. Reason: Make title bold
Feb 16th 2020, 7:59 am
#2
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Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,543
Re: New pension recipient and very confused.
I’m not at home so don’t have my paperwork to jog my memory, but, looking at the 1040 online and the instructions, Line 4c is where it goes. I’ve been retired for several years, so have a few miscellaneous pensions & annuities, I simply add them all together and put them on line 4c. And the fact that there’s no 1099 to back up your figures doesn’t matter, as long as you have records that you can refer to if there’s a question in the future.
If you live in the US, you don’t have to concern yourself with the tax treaty. Just pay your tax to the IRS. As for Oklahoma, I do have a bit of experience... many, many years ago my daughter lived there, and I did her taxes for her. I remember the form was very unusual and it seemed to be important to them as to whether she was a chicken farmer. Anyway I’m pretty sure I made a hash of it, but she never heard back from them.
If you live in the US, you don’t have to concern yourself with the tax treaty. Just pay your tax to the IRS. As for Oklahoma, I do have a bit of experience... many, many years ago my daughter lived there, and I did her taxes for her. I remember the form was very unusual and it seemed to be important to them as to whether she was a chicken farmer. Anyway I’m pretty sure I made a hash of it, but she never heard back from them.
Feb 16th 2020, 4:40 pm
#3
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Joined: Feb 2020
Posts: 4
Re: New pension recipient and very confused.
I’m not at home so don’t have my paperwork to jog my memory, but, looking at the 1040 online and the instructions, Line 4c is where it goes. I’ve been retired for several years, so have a few miscellaneous pensions & annuities, I simply add them all together and put them on line 4c. And the fact that there’s no 1099 to back up your figures doesn’t matter, as long as you have records that you can refer to if there’s a question in the future.
If you live in the US, you don’t have to concern yourself with the tax treaty. Just pay your tax to the IRS. As for Oklahoma, I do have a bit of experience... many, many years ago my daughter lived there, and I did her taxes for her. I remember the form was very unusual and it seemed to be important to them as to whether she was a chicken farmer. Anyway I’m pretty sure I made a hash of it, but she never heard back from them.
If you live in the US, you don’t have to concern yourself with the tax treaty. Just pay your tax to the IRS. As for Oklahoma, I do have a bit of experience... many, many years ago my daughter lived there, and I did her taxes for her. I remember the form was very unusual and it seemed to be important to them as to whether she was a chicken farmer. Anyway I’m pretty sure I made a hash of it, but she never heard back from them.
Thanks! That’s good to know, I’m wondering if I should paper file and attach something mentioning the lump sum. As far as I know there’s no option to do that online.
Feb 16th 2020, 4:49 pm
#4
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Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,543
Re: New pension recipient and very confused.
Well, I always file the old fashioned way, via the paper form. Maybe it’s just me - I find it’s much easier and more direct. You actually know what you are declaring and claiming. I’ve used TurboTax three times over the last last many years, and each time I’ve sworn - never again.
Feb 17th 2020, 12:16 am
#5
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Joined: Feb 2020
Posts: 4
Re: New pension recipient and very confused.
Yeah, I think that might be the way to go this year. I’m still not sure about the difference between an occupational pension and one that’s classed as government (local authority).
I think there’s something in the tax treaty about it. Why can’t they put these things in plain English 🤨
Maybe someone will have an idea.
I think there’s something in the tax treaty about it. Why can’t they put these things in plain English 🤨
Maybe someone will have an idea.
Feb 17th 2020, 6:32 pm
#6
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,966
Re: New pension recipient and very confused.
Local Authority pension to the best of my knowledge is a Government Service Pension.
My wife and I have 5 pensions paid in the UK, just filed my taxes yesterday using Turbo Tax. This year I see there is a 1040-SR which is a tax return for senior citizens. Our UK pensions are listed on line 7a Other Income, and on Schedule 1 line 8 with a note on that line "Pensions from United Kingdom"
Last year it was on line 6 of the 1040 which was line 1 thru 5a and line 22 from Schedule 1 added together.
Before I used Turbo Tax I put my UK pension on line 4c as Robin says. The problem was Turbo Tax wanted to produce and submit a replacement for the tax form the pension provider (if in the US) would produce for the IRS, if the pensions were shown on line 4c. As the providers didn't have a Tax ID number it wouldn't allow electronic filing. Searching the Turbo Tax help forum showed an acceptable solution was to file UK pension as "Other Income" and that was acceptable to the IRS.
As I said above did it that way last year and have not had any problem.
My wife and I have 5 pensions paid in the UK, just filed my taxes yesterday using Turbo Tax. This year I see there is a 1040-SR which is a tax return for senior citizens. Our UK pensions are listed on line 7a Other Income, and on Schedule 1 line 8 with a note on that line "Pensions from United Kingdom"
Last year it was on line 6 of the 1040 which was line 1 thru 5a and line 22 from Schedule 1 added together.
Before I used Turbo Tax I put my UK pension on line 4c as Robin says. The problem was Turbo Tax wanted to produce and submit a replacement for the tax form the pension provider (if in the US) would produce for the IRS, if the pensions were shown on line 4c. As the providers didn't have a Tax ID number it wouldn't allow electronic filing. Searching the Turbo Tax help forum showed an acceptable solution was to file UK pension as "Other Income" and that was acceptable to the IRS.
As I said above did it that way last year and have not had any problem.
Feb 17th 2020, 6:36 pm
#7
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,966
Re: New pension recipient and very confused.
UK Pensions related to UK/US Tax Treaty
Feb 17th 2020, 7:19 pm
#8
Heading for Poppyland
Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,543
Re: New pension recipient and very confused.
Local Authority pension to the best of my knowledge is a Government Service Pension.
My wife and I have 5 pensions paid in the UK, just filed my taxes yesterday using Turbo Tax. This year I see there is a 1040-SR which is a tax return for senior citizens. Our UK pensions are listed on line 7a Other Income, and on Schedule 1 line 8 with a note on that line "Pensions from United Kingdom"
Last year it was on line 6 of the 1040 which was line 1 thru 5a and line 22 from Schedule 1 added together.
Before I used Turbo Tax I put my UK pension on line 4c as Robin says. The problem was Turbo Tax wanted to produce and submit a replacement for the tax form the pension provider (if in the US) would produce for the IRS, if the pensions were shown on line 4c. As the providers didn't have a Tax ID number it wouldn't allow electronic filing. Searching the Turbo Tax help forum showed an acceptable solution was to file UK pension as "Other Income" and that was acceptable to the IRS.
As I said above did it that way last year and have not had any problem.
My wife and I have 5 pensions paid in the UK, just filed my taxes yesterday using Turbo Tax. This year I see there is a 1040-SR which is a tax return for senior citizens. Our UK pensions are listed on line 7a Other Income, and on Schedule 1 line 8 with a note on that line "Pensions from United Kingdom"
Last year it was on line 6 of the 1040 which was line 1 thru 5a and line 22 from Schedule 1 added together.
Before I used Turbo Tax I put my UK pension on line 4c as Robin says. The problem was Turbo Tax wanted to produce and submit a replacement for the tax form the pension provider (if in the US) would produce for the IRS, if the pensions were shown on line 4c. As the providers didn't have a Tax ID number it wouldn't allow electronic filing. Searching the Turbo Tax help forum showed an acceptable solution was to file UK pension as "Other Income" and that was acceptable to the IRS.
As I said above did it that way last year and have not had any problem.
I’m returning to the US on 6 Apr, hopefully that’ll give me enough time to get over the jet-lag and prepare & send off the taxes.
Feb 18th 2020, 7:12 pm
#9
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,966
Re: New pension recipient and very confused.
It seems that the 1040-SR has a larger font when printed, has a chart detailing the standard deductions. It can only be used if you take the standard deduction, if you itemize deductions you use the regular 1040, and you have to have turned 65, or older, before the end of the 2019 tax year.
Feb 19th 2020, 3:53 pm
#10
Heading for Poppyland
Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 14,543
Re: New pension recipient and very confused.
It seems that the 1040-SR has a larger font when printed, has a chart detailing the standard deductions. It can only be used if you take the standard deduction, if you itemize deductions you use the regular 1040, and you have to have turned 65, or older, before the end of the 2019 tax year.
Feb 20th 2020, 10:24 pm
#11
Just Joined
Thread Starter
Joined: Feb 2020
Posts: 4
Re: New pension recipient and very confused.
Local Authority pension to the best of my knowledge is a Government Service Pension.
My wife and I have 5 pensions paid in the UK, just filed my taxes yesterday using Turbo Tax. This year I see there is a 1040-SR which is a tax return for senior citizens. Our UK pensions are listed on line 7a Other Income, and on Schedule 1 line 8 with a note on that line "Pensions from United Kingdom"
Last year it was on line 6 of the 1040 which was line 1 thru 5a and line 22 from Schedule 1 added together.
Before I used Turbo Tax I put my UK pension on line 4c as Robin says. The problem was Turbo Tax wanted to produce and submit a replacement for the tax form the pension provider (if in the US) would produce for the IRS, if the pensions were shown on line 4c. As the providers didn't have a Tax ID number it wouldn't allow electronic filing. Searching the Turbo Tax help forum showed an acceptable solution was to file UK pension as "Other Income" and that was acceptable to the IRS.
As I said above did it that way last year and have not had any problem.
My wife and I have 5 pensions paid in the UK, just filed my taxes yesterday using Turbo Tax. This year I see there is a 1040-SR which is a tax return for senior citizens. Our UK pensions are listed on line 7a Other Income, and on Schedule 1 line 8 with a note on that line "Pensions from United Kingdom"
Last year it was on line 6 of the 1040 which was line 1 thru 5a and line 22 from Schedule 1 added together.
Before I used Turbo Tax I put my UK pension on line 4c as Robin says. The problem was Turbo Tax wanted to produce and submit a replacement for the tax form the pension provider (if in the US) would produce for the IRS, if the pensions were shown on line 4c. As the providers didn't have a Tax ID number it wouldn't allow electronic filing. Searching the Turbo Tax help forum showed an acceptable solution was to file UK pension as "Other Income" and that was acceptable to the IRS.
As I said above did it that way last year and have not had any problem.
Thats great, thanks!
