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UK Social Security retirement and Us tax returns

UK Social Security retirement and Us tax returns

Old Feb 15th 2012, 11:21 pm
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Default UK Social Security retirement and Us tax returns

Can UK social security retirement be included with US social security retirement or should it be reported separately on the 1040 return?

I have heard that is is fully taxable and should be declared with pensions and annutities. I Have also heard that it is better reported as Other Income.

What are other people doing with this one?
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Old Feb 16th 2012, 12:28 am
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Default Re: UK Social Security retirement and Us tax returns

There've been a couple of threads about that recently. You should be able to find them, or someone else may have the specifics..

Also this thread on the UK Yankee site
http://talk.uk-yankee.com/index.php?topic=73998.0

Last edited by robin1234; Feb 16th 2012 at 12:31 am.
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Old Feb 16th 2012, 1:08 am
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Default Re: UK Social Security retirement and Us tax returns

Thanks. Bottom line seems to be that UK social security is fully taxable in the US and can be reported on either Line 16 with Pensions and Annuities or on Line 21 as Other Income...either way the tax is the same.
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Old Feb 16th 2012, 3:47 am
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Default Re: UK Social Security retirement and Us tax returns

Originally Posted by eclectic_8 View Post
Thanks. Bottom line seems to be that UK social security is fully taxable in the US and can be reported on either Line 16 with Pensions and Annuities or on Line 21 as Other Income...either way the tax is the same.
Have you filed a US-Individual-2002? This will stop UK tax being withheld from your UK SS payments so that it is only taxable in the US. I'd probably enter it on line 21 and write in foreign pension. The thread linked to in the previous post is general for SS payments, one specific to US residents receiving UK SS is here.

http://talk.uk-yankee.com/index.php?topic=73868.0

Last edited by nun; Feb 16th 2012 at 3:51 am.
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Old Feb 17th 2012, 12:02 am
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Default Re: UK Social Security retirement and Us tax returns

Many thanks!
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Old Feb 17th 2012, 1:00 pm
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Default Re: UK Social Security retirement and Us tax returns

Originally Posted by nun View Post
Have you filed a US-Individual-2002? This will stop UK tax being withheld from your UK SS payments so that it is only taxable in the US. I'd probably enter it on line 21 and write in foreign pension. The thread linked to in the previous post is general for SS payments, one specific to US residents receiving UK SS is here.

http://talk.uk-yankee.com/index.php?topic=73868.0
When should one file the US-Individual-2002.. before applying for the UK State Pension, or after? (My wife is eligible for her pension since she is 61 but hasn't gotten around to applying for it yet.)
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Old Feb 17th 2012, 2:29 pm
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Default Re: UK Social Security retirement and Us tax returns

Originally Posted by robin1234 View Post
When should one file the US-Individual-2002.. before applying for the UK State Pension, or after? (My wife is eligible for her pension since she is 61 but hasn't gotten around to applying for it yet.)
As far as I can tell, I am not taxed in the UK on my state pension -- when I filled in the application form I indicated that I was not resident in the UK (and they could tell from my data that I had not been so for a very long time) and had no basis for taxation there, so it appears they automatically do not tax me.
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Old Feb 17th 2012, 2:41 pm
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Default Re: UK Social Security retirement and Us tax returns

Originally Posted by Nutmegger View Post
As far as I can tell, I am not taxed in the UK on my state pension -- when I filled in the application form I indicated that I was not resident in the UK (and they could tell from my data that I had not been so for a very long time) and had no basis for taxation there, so it appears they automatically do not tax me.
Oh OK, thanks .. so the US-Individual-2002 form is mainly for the convenience of the US authorities? I see from the form that one sends it in to HMRC, they send it off to the US IRS, then the IRS sign off on it and return it to HMRC.
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Old Feb 17th 2012, 2:54 pm
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Default Re: UK Social Security retirement and Us tax returns

Originally Posted by robin1234 View Post
Oh OK, thanks .. so the US-Individual-2002 form is mainly for the convenience of the US authorities? I see from the form that one sends it in to HMRC, they send it off to the US IRS, then the IRS sign off on it and return it to HMRC.
Just looked at that briefly, but it appears to be a way to get an official certificate you can send to anyone you receive money from in another country to confirm that you are not eligible for tax in that country, as you are paying tax in the US -- there's a place to indicate that you want multiple copies of the certification. I'll ask my accountant about the whole thing (her OH gets an overseas pension, so she's usually up on such things), but I think that the info I gave in completing the initial form and then having direct deposit to the US did the trick for me in not getting taxed at source.
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Old Feb 17th 2012, 2:57 pm
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Default Re: UK Social Security retirement and Us tax returns

Originally Posted by Nutmegger View Post
Just looked at that briefly, but it appears to be a way to get an official certificate you can send to anyone you receive money from in another country to confirm that you are not eligible for tax in that country, as you are paying tax in the US -- there's a place to indicate that you want multiple copies of the certification. I'll ask my accountant about the whole thing (her OH gets an overseas pension, so she's usually up on such things), but I think that the info I gave in completing the initial form and then having direct deposit to the US did the trick for me in not getting taxed at source.
My wife was going to have her's direct deposited in a sterling account in the Isle of Man. That shouldn't make any difference to the tax consequences, though..
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Old Feb 17th 2012, 3:04 pm
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Default Re: UK Social Security retirement and Us tax returns

Originally Posted by robin1234 View Post
My wife was going to have her's direct deposited in a sterling account in the Isle of Man. That shouldn't make any difference to the tax consequences, though..
I've found the dd good -- it comes in dollars with no transfer fees. Mind you, my pension works out to about a nice bottle of wine a week, but better than nothing!
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Old Feb 17th 2012, 9:27 pm
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Default Re: UK Social Security retirement and Us tax returns

US taxes on worldwide income UK doesnt well not yet but sure will come in soon
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Old Feb 17th 2012, 10:12 pm
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Default Re: UK Social Security retirement and Us tax returns

Originally Posted by londonights View Post
US taxes on worldwide income UK doesnt well not yet but sure will come in soon
The UK does tax worldwide income, but I depends on your residency and other factors like if you can pay HMRC GBP30k not to tax you on an arising basis.

US taxes it's citizens on their worldwide income irrespective of where they live. Of course how much tax is due will depend on FEIE, FTC and tax treaties
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Old Feb 17th 2012, 10:14 pm
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Default Re: UK Social Security retirement and Us tax returns

if your overseas income stays overseas i was told not taxable in the UK am I wrong?
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Old Feb 17th 2012, 10:55 pm
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Default Re: UK Social Security retirement and Us tax returns

Originally Posted by londonights View Post
if your overseas income stays overseas i was told not taxable in the UK am I wrong?
Yes. The rules are complicated and seem to be in a bit of flux, but if yo are UK resident and ordinarily resident and domicile your foreign income is taxable in the UK on an arising basis. Even I'd you aren't UK domicile foreign income can still be taxable on an arising basis

Last edited by nun; Feb 17th 2012 at 10:59 pm.
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