It is good to see that the mainstream press is covering the FBAR / VDP issues surrounding foreign retirement accounts:
However, there is some misinformation, such as: “Americans who spend their entire career working abroad will probably not be eligible for much, if anything, from Social Security since they cannot contribute to it while working abroad.” This is not true if the country in question has a Social Security totalization agreement with the US. In such cases, it would be possible to draw Social Security benefits later in the US based upon what was paid in social security to the foreign country.
It does not appear to me that such foreign social security contributions are deductible under the Foreign Tax Credit. I believe that US Social Security contributions are (another form of discrimination). Mrs Serrato from ACA is quoted in the article as saying the same thing: “many wealth, social and value-added taxes in Europe were not eligible for credits or deductions on American taxes. ‘They could be a significant part of your foreign tax bill, but you can’t apply them to your U.S. taxes, so you just pay them,’ she said.” Yeah, right, just pay them… and give up the new refridgerator you need and cancel your vacation and your kid’s college.
What is lacking in the article is the extreme sense of outrage that many of us who are middle class and living abroad are feeling.
Please SWAT (Speical Writers and Theses) this article with comments. Thanks to Joe Smith for finding the comments page: http://bucks.blogs.nytimes.com/2013/04/05/financial-lessons-for-american-expatriates/?comments#comments.
There are already numerous comments and it seems that people that are commenting really understand the issues… and I haven’t seen any hostile trolls there yet!
Also, I mentionned the article in this Maple thread: http://maplesandbox.ca/2013/aca-blasts-fatca/#comment-6097
Comments can be submitted here
nope, try this.
It has been brought to my attention the “5 year tax rule”. I cannot find anything specific stating if I reside abroud for more than 5 years, and do not return to the US for 6 consecutive months, after 5 years I will not be eligible to collect social security in the future… is this true? I pay my SS tax every year and file taxes appropriately. Anyone have some wisdom concerning this?
Here is a previous comment I made that you should find useful regarding US Social Security questions. Many countries have treaties with the US regarding US Social Security. http://isaacbrocksociety.ca/expat_tax/comment-page-6/#comment-234317