Moonsquirrel

Ha, TT is pretty much a replica of the actual form in this case - junk in, junk out.

It's part III that's giving me the eeby jeebies! So my whole pension (excluding state pension) amount goes in part III 2d?

theOAP

Are you using TT or are you filling in the forms yourself? Isn't TT populating form 8938 for you from your input into the TT questions (?, I don't know how it works). It should(?).

It sounds like you need help from someone who knows about TT if you're depending on it to produce a final return. If you intend to override TT, then you'll need to review each of the IRS forms' instructions for how to complete the form. Just randomly putting numbers in a few places doesn't work.

Moonsquirrel

Yes to using TT, but I've also reviewed the actual IRS form, and tbh, TT is just asking the same questions as the IRS form - they correlate pretty closely for part III especially, with the same options given.

So you think the whole pension amount should work in part III 2d?

theOAP

I don't know what kind of pension you have. It may go on form 8938 (defined benefit or defined contribution), or, it may go on form 3520 in which case the only reference to it would be in Part IV on form 8938 and nowhere else. What stance are you taking on the pension regards the US/UK Tax Treaty? Is it a grantor trust?

Moonsquirrel

Ug, sounds like I need to do some more research on that one, as I haven't the foggiest. It's only $1k so be no means a substantial amount. It was set up by my previous employer through my employee pay roll with Scottish widows, I no longer pay into it, and can transfer it to another pension provider if I like.

Ha, the more I read, the more I realize I don't know. Sounds like a grantor trust from my initial reading ... maybe?

audio

8938….How ridiculous is this? IMOP The IRS really ought to get their act together and produce something that at least a rocket scientist could cope with.
From without doubt educated thoughts, one thinks this way and another different way. My fired CPA thought yet another, so what hope have we mere mortals apart from a fine from the IRS topping up their much needed coffers?
They in my experience have been no help to me whatsoever?
Did the Yanks really send people to the moon?
Makes me wonder I have to say.


Moonsquirrel, my thoughts are with you with this doomsday machine

Moonsquirrel

Yes!! It's a defined contribution pension, which means 8938 only, not 3520? Right? Losing my marbles over this one..

mrken30

Yes they did, but they never managed to produce a commercial supersonic jet. They did try , but the Brits and the French were better at building fast planes.

https://en.wikipedia.org/wiki/Boeing_2707

audio

I too think they did but others still think they didn’t.
Another flat-earth society some will no doubt comment.

kodokan

That's the approach I take; 8938 but no other forms. If it helps, it's the approach that Deloitte took when they filed our first US tax return. They were stunningly unconcerned about the pensions beyond the expected 8938/ FBAR reporting, and very much gave the impression that the IRS wasn't out to target expats with irrelevantly small foreign accounts acquired during the everyday course of life, as distinct from people making deliberately... unusual financial choices.

Asg123

Good point to bear in mind. So one doesn't need to worry too much if one doesn't get it quite right. (and it's reporting, not tax)

theOAP

But if a rocket scientist could cope, it would defeat the purpose of 8938, 8621, etc., and the American desire for every US Person to only have financial assets in the US, and no where else.

The UK will tax income from foreign sources if the UK taxpayer is resident in the UK and files on the arising basis. The US does the same, although unlike the UK (and to the chagrin of some who wish the UK would do the same), the US has a propensity to punish anyone with a source of income, investment, or asset that is 'foreign' (and the US will see foreign pensions as foreign assets).

Which would brighten the day of an IRS agent more: collecting tax on the interest from a £100,000 foreign savings account (paying 2% interest), or having the right to enforce a $10,000 penalty for not filing 8938 on the account?

The mantra of discovering and punishing taxevadingdrugrunningmoneylaunderers is laudable, but it remains questionable if an additional goal might not also be to discourage anyone having a foreign bank account, investment, or asset as long as they remain a US Person, even if that person is resident in the UK with a UK paycheque, a UK mortgage, UK electric and gas bills, UK investments to help avoid becoming a ward of the State in old age, etc., or, that UK person who had those assets before coming to America.

That's why Congress, at the considerable urging of the US financial industry, enacted legislation to enforce an ease for filing with US only assets and makes filing with foreign sourced assets so difficult. Of course, the tax preparation industry doesn't mind the additional complications. Welcome to America, Land of the Free.

Whether in the US or abroad, if a US Person has foreign assets, they must plan ahead for all the eventual consequences. KISS (keep it simple).

I once read an interview by a tax advisor in the Gulf States with one of the IRS authors of Form 8938. The comment from the IRS person was: "As we sat around the table when we were done, we all agreed that we were very glad we didn't have to be the one completing this form".

/End rant (?)