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Hi I am a green card holder planning to give up my Green

Hi I am a green...
Hi
I am a green card holder planning to give up my Green card and return to Greece which is my country of origin
I have a 401 k plan and I will be eligible for social security benefits at the age of 65
I am not a covered expatriate when I return the green card
What's is the effect on my 401K and social security the relinquishing of the Green card under these circumstances
Thank you
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Answered in 25 minutes by:
12/3/2012
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,205
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D :

Hello and thank you for using Just Answer,
Sorry another expert was able to lock me out of your request till now.
The 401k will be taxable to you when you start receiving it. Your contributions were not taxed when you made them so even when you give up your green card they will be taxable at that time.
A nonresident alien must include 85% of any U.S. social security benefit (and the social security equivalent part of a tier 1 railroad retirement benefit) in U.S. source fixed or determinable annual or periodic income. Social security benefits include monthly retirement, survivor, and disability benefits. This income is exempt under some tax treaties. The Greece/US treaty lists Social Security as 30%.

Customer:

Robin thank you for the answer

Robin D :

You are welcome

Robin D :

Please do not forget, rating the assistance is a very important part of Just Answer. Just Answer uses positive ratings and the follow up survey to ensure that experts are available for assisting and answering questions.

Customer:

To understnd better I do not loose the social security benefits but a portion of the monthly payments will be taxable in the US (depending on the tax treaty with Greece) and I will be able to receive them living in Greece?

Robin D :

You can apply for the Social Security payments. That is outside of the tax area but if you are aid US Social Security then you will be taxed on those payments at a 30% rate. The 401K too will be taxable when you take the money out.
Look to this link for info about being outside the US and social security benefits
http://www.socialsecurity.gov/pubs/10137.html#a0=4

Customer:

Thank you again for the answer I just wanted to be clear that giving up the green card does not change your eligibility for social security payments

Robin D :

Not by itself, from what I saw on the SSA site, but again that is not a tax question so I gave you the actaul authority to go to directly (SSA).

Customer:

On a more tax related questions


I am thinking of relinquishing my green card and file form 8854 before the end of this year


 


The taxes I will file for 2012 will be for two periods as a resident and a non resident


 


How do I know what period I file as a resident and what as a non resident


 


Also next year I will continue to have income from a US source and possible from outside the US


 


I assume I have to file 1040NR for 2013 for my US source income and continue to file every year that I have a US source income? (like 401 k and social security)


What about form 8854 I only have to file once?

Robin D :

Thast is correct, you would use the 1040NR from when you are no longer a US person. Yes, on the 8854. If you are not a covered expatriate then you need file that once.

Customer:

Thank you

Robin D :

You are welcome

Robin D :

CHAT has been having some problems today. Let me knowif you can not rate

Customer:

I will not a US person anymore when IRS acknowledges receipt for 8854 or when I mail it

Robin D :

Tthe date of your termination of residency will be the LATER of the date you notify the Department of Homeland Security or the date Form 8854 is filed with the IRS in accordance with the instructions for the form. If that is in the middle of a year you may have to file both resident 1040 and nonresident 1040NR splitting the income for both in that last year.

Customer:

Great thanks one more clarification

Robin D :

Glad to help

Customer:

For my case that I will try to do both by year end 2012, how do I split the days between 1040 and 1040NR not knowing when IRS actually receives the form 8854

Robin D :

If you file at the end of the year and you also surrender the green card by then, you would list the income fo rthe tax year on the 1040 as a resident. The dual residency would apply if you did it all (let's say mid year) and also physically left the US and continued to receive US sourced income.


Generally, if you surrender your green card during the taxable year, your tax status as a resident alien will terminate on the last day of that calendar year. BUT, if you can establish that you left the US and had a closer connection to the other country then you would go by the date you left.

Robin D :

?

Robin D :

You release me when you rate

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12:28 PM


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Are you have difficulty with the CHAT

Customer:

sorry to continue asking you on this but I got a but confused here If i manage to give up the card and file for 8854 by dec 10th 2012 i will file 1040 for the whole year 2012 or till dec 10th and then 1040nr for the last 20 day of 2012?

Robin D :

The whole year of 2012 would be 1040

Robin D :

Hope that clears it up

Customer:

Sorry for the delay one last question when do I stop filling FBAR froms?

Robin D :

When you are no longer a US person. If you are not a covered expat (based on the income) as you stated then you would not need to file a FBAR after 2012 (provided that is your last year for resdiency).

Customer:

Great thank you very much you have been very helpful

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,205
Experience: 15years with H & R Block. Divisional leader, Instructor
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