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Generally, if the settlement does not include alimony (which is taxable to the recipient) any of your spouse's PRE tax retirement, then it is not taxable.
Are you getting alimony?
Maybe if you just told me what you were awarded in the divorce
ok......what is in the settlement for you?
before we get too far, I wanted to be sure to give you this link too:
ok......I REALLY want to help you.......but we are at opposite ends.........I generally see people that are either already divorced, OR asking if a SPECIFIC item is taxable
with a little patience on both of our parts, I think I can help you
can you start by asking what you think is a yes/no question?
ok........let me hit some high points, ok?
Before I do............you have to know that you can come back here an post as many follow up questions as you (or your attorney) need.......ok?
Taking the Pub I referenced above might be a good way for your attorney to start...........generally property settlements between husband and wife incident to divorce are not taxable.......but of course, there are exceptions
if you are awarded alimony, then that will be taxable .........since you are going back to the US you probably don't want to mess with alimony
If you get awarded some of your soon to be ex's PRE tax retirement, then you must pay tax on the $ amount that you receive, but no 10% penalty refer your attorney to the QDRO instructions in pub 504
I can give you a page # XXXXX a second
refer her to page 17 of the pub for lump sum from your ex's pre tax retirement fund
will your divorce be final before 12/31/2013?
Ok....do you have any children?
over age 24?
ok do you have any earned income....W2, self employment?
Where did you come up with $120,000? What (I know this is roughly) but what did you use to arrive at that number
good, I'm glad you knew to file joint
figuring your filing status had to come first
ok.......do you 2 own property together?
As long as he's taking a loan NONE of that $120,000 is taxable to you
now you just have to decide if its fair and equitable
doesn't matter what you do with it..................its your money
however, you DO have to decide if you're going to keep your US citizenship
Alimony is taxable income........which would make it necessary for you to file a US tax return......
give me a second please
I need to cross reference before I say more
sorry........just 1 second
because as a US citizen you are required to report, and pay tax on world wide income
That would include your US alimony
I'm looking at the treaty between US and UK
alimony is not specifically mentioned
that would be something I would have to spend a little more time with to answer..........and I'm happy to do that for you, since I don't think we will resolve all of your questions tonight
Here's the link to the treaty
ok........this is probably why you never got a simple yes/no.......this is NOT a simple matter..........so, before I upset or confuse you more.......can you hang with me for just a minute, ok?
Here's what the IRS says.........but please hold comments until I give you the whole picture ok?
Many Americans think because they’re earning money in another country – and paying that country’s taxes – they have no liability when it comes to their home country and that they are not required to pay expat tax USA. That’s totally not the case. You still should file a return with the U.S. every year, whether you have income or not. You are not legally required to do so if you don’t owe U.S. taxes, but it’s an important preventative measure as there is a Statute of Limitations on tax disputes. If there is a dispute over back taxes, you start running out the clock on the Statute of Limitations if you file. If you don’t, the IRS can conduct a personal audit at any time in the future and you’ll be liable if they decide against you.
The IRS provides a tax guide for citizens living abroad, this can be found here. There are also some basic facts you need to know about taxation in 2012.
exclude up to $97, 600 of foreign wages from taxation by the IRS once you have lived in the UK for 330 days in 12 months
so............the IRS says you have to report and pay tax on all of your income EXCEPT your foreign earned income.........and.........your divorce settlement (if he takes a loan to pay you) and except what is treatied out
if you're totally confused.............that's ok.........I know how confusing this is.....because I actually PREPARE all of these returns in my district
sometimes I have to sit back and read something over and over to make sure I REALLY understand what I am reading
you won't owe if on your wages....but........you will have to file a US tax return with the proper form
that you remain a US citizen
what's your first name?
I get the feeling we're going to know each other fairly well before this is all over
and I don't really know how to make it UNCOMPLICATED
but I will try
unless you give up your U\
sometimes I don't like this chat room.....
unless you give up your US citizenship, you will have to file a US return EVERY year proving you do not owe US tax on your wages, bank interest, etc.
however, you will owe tax on US paid alimony
If you give up your US citizenship........(and I will reference the proper forms if this is what you decide you want to do) I need to find out about alimony paid to non US citizen in UK......and I WILL find this out
Just can't put my fingers on it tonight
are you still with me?
Did what I just typed help?
that's ok........you don't need to make any changes right now........you just need to know that you will need to file a US tax return every year
and that you CAN become an "expatriot" (non US citizen) later if you so choose
and I'm trying to squeeze in as much information to you as I can\
however, she will probably want some additional information, and that
SOMEONE can file your return
either in person (there's probably someone in UK that knows how)
or you can upload your docs to a tax pro in the Us
and the US tax pro can prepare your US tax return
you can bookmark this page if that helps
you're very quick Lynn
that's a good thing
absolutely.........just come back here and post your question
the system will let me know that you have posted\
If you could make your "lock" for me about 8 hours (you won't have to wait that long......I check in alot) but that would help me
I'm preparing for an open house on Sunday for my husband's birthday
lot going on
you may pay now, or when we're all done...........you're choice
I will come back and answer your questions either way
if you can't lock the question ...........you may either tell any other experts that you're waiting for me specifically, or you may begin to work with them...........it is your choice (I say this because I promise you I won't be up at 8AM)
by 10.........but not 8
its my off season.........lol
and I got the impression your chat with your attorney will be early?
it means that I have a certain amount off time to answer your question.......and during that time, other experts are not supposed to be able to access your question..............
its a way to not have to explain everything twice
Please remember to have your attorney reference
I was going to tell you good luck..........lol
You're the one that matters now
no... your follow up questions are free.........they will ask if you want to leave a bonus, and that's totally up to you
I will give you the same service regardless
Is your head spinning?
or do you feel like you have a better handle on things
a better understanding
As part of a financial settlement on divorce the courts can make:
in respect of the pension rights of either partner. You need to be aware of the statutory provisions that govern the financial settlement between former partners in order to establish who is to be charged on a pension.
An attachment order allows the courts to order the payment of maintenance from a pension receivable by one of the partners. When the member of the pension scheme becomes entitled to receive payment, the scheme trustees pay the amount specified in the order directly to the ex- spouse. The pension remains the income of the scheme member and:
The pension received by the non-scheme member ex-spouse is tax-free in his or her hands. An attachment order may also be referred to as an earmarking order.
If I read this correctly, it would have been the owner of the retirement pension who would pay tax if he/she had to give some of it to their ex
Run that by your attorney and see if he/she reads it the same way...........