Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

I am receiving some income from a foreign government "social…

I am receiving some income...
I am receiving some income from a foreign government "social security-type" benefit program. Where should I report this income in my Tax Return? Should I report it as "Other Foreign Financial Assets"?
Show More
Show Less
Ask Your Own Tax Question
Answered in 40 minutes by:
10/8/2017
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,789
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
Verified

Hello. Thank you for choosing this Q&A service for assistance. My name is Angela. I will be assisting you.

In order to better assist you, please let me know what country are you receiving the benefits from? The benefits may or may not be taxable depending upon certain circumstances.

Ask Your Own Tax Question
Customer reply replied 10 months ago
Hi Angela,
I ma receiving the benefits from Colombia. The benefits consist in an age, disability and death pension paid in a monthly basis by the Colombian Governmental Pension Administrator entity.Thanks for your prompt reply.

You are welcome. I just checked, there is not a tax treaty between the U.S. and Columbia, nor is there a Totalization (Social Security Agreement) between the U.S. and Columbia, which means that your pension is taxable here in the U.S. You may be required to file the Form 8938 as well. SEE BELOW:

------------------------

Foreign Social Security Pensions
Most income tax treaties have special rules for social security payments. In many cases, foreign social security payments are taxable by the country making the payments. Unless specified otherwise in an income tax treaty, foreign social security pensions are generally taxed as if they were foreign pensions or foreign annuities. Unless a tax treaty allows it (see, e.g., the USA-Canada treaty), they are not eligible for exclusion from taxable income the way a U.S. social security pension might be.

REFERENCE SOURCE:

https://www.irs.gov/businesses/the-taxation-of-foreign-pension-and-annuity-distributions

----------------------------

Reporting Requirements

The reporting requirements for foreign pensions can be quite tricky, as there may be additional requirements on top of simply reporting employer contributions to foreign pensions and income earned from the pensions on your US tax return. You may also need to utilize the following forms, depending on your specific situation:

  • Form 3520 – This form is required if you have any transactions with a foreign trust
  • Form 3520-A – This form is required for trustees, and includes information the grantor needs in order to file Form 3520
  • Form 8621 – This form is required if PFIC rules apply
  • Form 8938 – This form is required to report all foreign financial assets, including foreign pensions, if you meet the filing threshold
  • FinCEN Form 114 – This form, also known as FBAR, requires the reporting of foreign bank and financial accounts if you meet the filing threshold

Filing threshold for Form 8938:

Unmarried taxpayers.

If you are not married, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. Married taxpayers filing a joint income tax return.

If you are married and you and your spouse file a joint income tax return, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year.

If you do not meet the filing threshold, you do not have to file the Form 8938.

--------------------------------------

I have more to add I will get back to you shortly.

Ask Your Own Tax Question

You will report the foreign pension amount on Line 16 of the Form 1040.

If you do not require further assistance with this matter, I ask that you please take the time and scroll to the top of the page and select 3 or more stars to positively rate my response so that I can receive credit for assisting you. A 5 star rating is greatly appreciated. Thank you in advance.

Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,789
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
Verified
Tax.appeal.168 and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 10 months ago
Angela,
Thanks a lot! You were most helpful!!
Have a great evening!

You are very welcome. Thank you for the positive rating. I do appreciate it. You have a good evening as well.

Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Tax.appeal.168 Your Own Question
Tax.appeal.168
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,789
4,789 Satisfied Customers
Experience: 3+ decades of varied tax industry exp. Tax Biz owner

Tax.appeal.168 is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
International tax law? Interpretation of FBAR and 8938
interpretation of FBAR and 8938 reporting exceptions? … read more
taxmanrog
taxmanrog
Master\u0027s Degree
1,040 satisfied customers
This is regarding reporting of the Singapore Central
This is regarding reporting of the Singapore Central Provident Fund (CPF) pension fund. I am a US citizen residing and working in Singapore. There was a thread about this issue in 2012. Can i check if… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Does a foreign government type "social security" benefit
Does a foreign government type "social security" benefit plan need to be reported on an FBAR as a Foreign Financial Account?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,634 satisfied customers
Does the U.S. IRS require tax to be paid in the U.S. for an
Does the U.S. IRS require tax to be paid in the U.S. for an amount received from Canada called Old Age Security? I live in Missouri and am 73 years old. This income is not from the Canadian Pension Pl… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
Robin,I have a client who have a Danish Pension and paid
Hi Robin,I have a client who have a Danish Pension and paid taxes on it, how do I report a Danish Pension on the Form 1040? Is there any other filing requirements to report the Danish Pension?This is … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I am dual citizen of USA and Spain and have lived, worked,
I am dual citizen of USA and Spain and have lived, worked, and recently retired in Spain for the last 38 years. I file both a Spanish and US 1040 each year. My question is now that I am retired will m… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
How should I report a lump sum payment received in
How should I report a lump sum payment received in Colombia(country) for retroactive government pension. There is no treaty between Colombia and USA… read more
Tax.appeal.168
Tax.appeal.168
Tax Accountant
4,789 satisfied customers
I'm an American citizen and have been living abroad
I'm an American citizen and have been living abroad for the last 9 years. I have just discovered that recently the US government passed a law that obligates me to declare my foreign bank accounts. How… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I will start receiving Social Security benefits next year and
I will start receiving Social Security benefits next year and also some similar retirement benefits from the other country. I've heard that my US SS benefit will be reduced by the amount I get from th… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
Because I'm on Social Security Disability Income all of my
Because I'm on Social Security Disability Income all of my income and assets count against me for staying on that (which is best for me right now). Is there a company (or something) I can create where… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I am an expat working and living abroad and paying into a government
I am an expat working and living abroad and paying into a government required pension plan that is a privatized social security program in the Cayman Islands, which is where I live. My employer decide… read more
Lane
Lane
JD, MBA, CFP, CRPS
Doctoral Degree
47 satisfied customers
I have lived in the US since 2006 and have both US (since recently)
I have lived in the US since 2006 and have both US (since recently) and Dutch citizenship (by birth). I still have a number of assets in the Netherlands for retirement purposes as follows: 1) A define… read more
taxmanrog
taxmanrog
Master\u0027s Degree
1,040 satisfied customers
Hi My name is Raul. I work in Boston in an american company
Hi My name is Raul. I work in Boston in an american company and i've doing tax return based on my W2 since I moved from spain to USA in 2010. I have also assests in Spain (saving accounts, parking gar… read more
Lane
Lane
JD, MBA, CFP, CRPS
Doctoral Degree
47 satisfied customers
What type of legal entity, i.e. LLC, C-corp, Trust, etc...,
What type of legal entity, i.e. LLC, C-corp, Trust, etc..., can pay or GIFT or otherwise financially support (as in pay medical or other bills for) an adult us citizen without that "beneficiary" or "g… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Hi, On IRS Form 8938 Statement of Specified Foreign Financial
Hi, On IRS Form 8938 'Statement of Specified Foreign Financial Assets' Part III 'Summary of Tax Items Attributable to Specified Foreign Financial Assets' Where do I report that I paid taxes (to a fore… read more
R. Klein, EA
R. Klein, EA
Tax Advisor
Master\u0027s Degree
3,104 satisfied customers
Hello I am a us alien resident with 9% share in a private company
Hello I am a us alien resident with 9% share in a private company in Dubai worth about 10,000,000 dollars, are those shares reportable to the IRS under facta and which form shell I use… read more
Shane-CPA
Shane-CPA
CPA, PFS, CGMA
1 satisfied customers
I have a tax question regarding reporting of foreign retirement accoun
I have a tax question regarding reporting of foreign retirement account (called CPF) which is a comprehensive social security savings plan. The website link is: http://mycpf.cpf.gov.sg/CPF/About-Us/In… read more
USTaxAdvising
USTaxAdvising
Partner
Bachelor's Degree
609 satisfied customers
I own an apartment complex in a low income area, some of ...
I own an apartment complex in a low income area, some of our residents are on some sort of government assistance. Within the past year I have lost over $32,000 in rent where people have skipped out in… read more
MequonCPA
MequonCPA
CPA Firm Owner
Master's Degree
2,165 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x