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Question

I am a US rtax resident and 61 years old. I have lived overseas in Australia for 20+ years and my domicile, children and assets are all in Australia.
In Australia, our employers contribute to an Australian regulated and taxed superannuation fund.
I am about to commence a pension approx $30,000 per annum from the Australian fund.
The pension is tax free in Australia as we have been taxed on our contributions over the past 20 years
Will i be required to a) declare the pension income on my US tax return and b) will there be any tax payable on the Pension in the US
Thanks for your help.
Regards
Kieran

Submitted: 62 days and 6 hours ago.
Category: Tax
Value: $26
Status: CLOSED
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Optional Information

Country/State/Province of question: US vs Australia

Already Tried:
Internet and Australian tax advice - but nothing seems to help with the US side.

Accepted Answer

Hi XXXXXXXXX

Thank you for using justanswer. US citizens are required to report, and pay tax on, world wide income, so yes, you will have to file a US Form 1040.

You probably have been excluding your earned income by filing Form 2555Foreign Earned Income and taking the exclusion, but pension income doesn't qualify for that exclusion. See nstructions for Form 2555

You will be able to subtract your standard deduction ($5700 if filing single, $11,400 if filing jointly) along with the personal exemption amount of $3650 per person/dependent.

Since you have already paid tax on this money to Australia, you may claim a credit for that tax by filing Form 1116Foreign Tax Credit

I hope this helps.

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Expert: Anne
Pos. Feedback: 100.0 %
Accepts: 
Answered: 9/21/2009

Master Tax Preparer

Enrolled Agent with 20 Years Experience specializing Individual and Small Businesses

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