Elvira

What I meant was do I still have to file in the US at all if I live in the UK and file my taxes there, assuming that my husband has US income for which HE has to file a US tax return.

Sally Redux

Hiya - up and down is probably the way to put it.

Chalk it up to experience, E xx (you know, I've forgotten your real name now)

Giantaxe

An unfortunate use of the word "jointly" in this context

This IRS link seems to imply that it's your choice:

http://www.irs.gov/businesses/small/...=96370,00.html

However, I am unsure what obligations, if any, people who give up their permanent residence status have.

Another factor here is whether you are eligible for US social security, or whether the US/UK SS agreement could make you so.

If I was in your position, I would invest in some professional advice. You're making some big decisions here regarding your financial future, decisions that likely can't be reversed.

Elvira

Thanks. Unfortunately our accountant is pretty useless.

Elvira

At my age I don't need any more of these kinds of experiences, TYVM What wouldn't I give for a quiet life...

Sally Redux

Good luck! But I still think Ray's was a good idea.

penguinsix

You may want to consult the US expatriates board (http://talk.uk-yankee.com/) as some of them have accountants in London and the UK who deal frequently with US-UK tax issues, especially as it relates to paying US taxes while in the UK. They have a special tax forum specifically for US-UK tax issues. Someone there might have 'been there/done that' or at the very least point you to a good accountant who knows their stuff.

I can't recall off the top of my head the exact rules for green card surrender tax payments, but it's not simply 8 years--I believe there is an income amount that triggers the requirements (i.e. if you are under $140,000 or so, or have less than a certain amount in assets, then you are ok).

It's also pretty easy to file "married, filing separately". I know a few USC here in Hong Kong who are married to foreign nationals and file accordingly (as their spouses do not want to get roped into the US tax system whatsoever).

dunroving

Don't mean to hijack Elvira's thread, but this looks like good news to me, as I have seen it said many times on here that you only qualify for a US SS pension if you are a USC or LPR .... I have 40 quarters of US SS payments and didn't want to simply roll it over to my UK NI pension payments (though I understand that under the Windfall provision I may be screwed anyway).

Elvira, let me add myself to the list of people saying congrats on your decision, I know the US has rubbed you up the wrong way for a while.

Rete

Simple - No, you do not have to file US taxes if you have no US income. The interest on you retirement account does not count and will be taxes when you withdraw it.

Your husband can file "married, separate" using your social security number and does not report any income you derive in the UK and as stated, if you have no income in the US, you do not file at all in the US.

dunroving

Do you mean that retirement payments are taxed at source (e.g., for monthly 401k payments)?

What if it shouldn't be taxed (e.g., if you have a very low income on retirement)? Would you then have to file a US tax return to recover the taxes deducted at source?

Giantaxe

Tax will be withheld at source at 30% (?). But as Michael has pointed out on another thread, a few thousand of income will be tax free. I believe you'd need to file a US return to recover this. But such a simple return really isn't a big deal.

Rete

No, she will be taking out the money before she reaches 59-1/2 so she will need to pay that year's taxes in the US. And then at that point, she is finished with IRS for good. If she does not take the monies out of the plan, then she pays taxes (if any is owed) at the time she starts withdrawing.

Honestly don't know if it is recoverable?

Steerpike

Don't forget that you can legally start withdrawing from your IRA (and thus, from your 401k if you roll it over) BEFORE 59.5 and avoid penalties as long as you follow certain guidelines. This page explains it.

Vicky88

You might want to check out inheritance tax because there are implications if hubby is a US citizen and he leaves to a non-US citizen. It is probably worth consulting a tax specialist to go over your situation before making any move that would cost you.

Rather than pay tax on your 401k withdrawals look at doing a 72t.