satigerbrit

My wife had a lump sum payout and now gets a monthly pension. I get just the monthly. No tax UK side. What is taxable in US and where / how to enter ?

lansbury

You don't provide enough information. Are you both UK citizens?

Are any of these pensions Government Service pensions, and if so have either of you taken US citizenship?

If not then probably you will pay US tax on all of the pensions including the lump sum. But as you seem unsure even how to fill the 1040 out perhaps for this year get a CPA to do it to make sure you get professional advice, especially concerning the lump sum.

There is an expat tax consultant who posts here Peter Newton, he is highly recommended, and you might consider engaging his professional services.

I hope I'm not breaking the rules by giving Peter's contact information.
www.britishexpatstax.com

satigerbrit

We are both still UK citizens, receiving partial UK pension from NHI contributions prior to 1972. Tks for your info.

lansbury

In that case I believe that you just declare it on the 1040, there is a line for pensions which without digging out an old one of mine I can't remember the line number. (In the 20s I think). My UK pension goes on the same line as my wife's US and UK pensions as a lump sum.

It is the lump sum which worries me. If it was paid in 2010, so going on your next tax return, it may well be taxable. It is the lump sum where it gets complicated and you may well need professional advice. Depending on the size of the lump sum it could be money well spent.

I took the lump sum on my pension while still in the UK. My wife had a lump sum on one of her UK pension, which became due after we moved here, and to avoid tax on the lump sum here we took the full monthly amount and opted out of the lump sum.

Peter Newton

Assuming the pension payments are taxable in the US (which they generally will be if you are a USC, LPR, or resident in the US for tax purposes), then they get reported on form 1040, line 16.

It doesn't matter if you don't receive a 1099-R from the payor reporting the payments to you- if they are taxable in the US, then they have to be reported on your tax return.

satigerbrit

Thank you. I am trying to do this in Turbo Tax and it seems to not allow pension payments without a 1099R. So it looks like a pro will be the solution.

Steve_

It's just miscellaneous income, just declare it. There's nothing in the tax treaty that helps you, so I'd put it down on line 21 as a foreign govt. social security benefit. As long as it works out mathematically to the correct amount of tax that's all that matters. It's not a pension as defined in the tax treaty, it's a social security benefit, so I don't think it should be on line 16.