@osbuntax611 wrote:
Thank you for your reply. I would like to move to the Philippines. I also would like to make an early withdrawal from my IRA. Do i need to pay the 10% penalty because i am only receiving social security disability?
Yes, there is an exception to the 10% early withdrawal penalty if you are "totally and permanently disabled."
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-o...
However, for income tax purposes, disabled means you can't perform any gainful activity (work for money). You could have a medical disability (amputee, for example) and still be able to perform certain jobs for money, maybe with accommodations. It may be sufficient to show that your employer or the social security administration considers you unable to work, but that is something you may want to discuss with a tax advisor in case of audit.
The IRS says: "You are considered disabled if you can furnish proof that you can't do any substantial gainful activity because of your physical or mental condition. A physician must determine that your condition can be expected to result in death or to be of long, continued, and indefinite duration."
As a general rule, a US citizen must file and pay US tax on all their world-wide income, no matter where they are living or where the income is paid. The only way to stop that is to give up your citizenship. If you are also taxed in the foreign country where you live, you can claim a deduction or credit to reduce the effect of double taxation. @pk is the expert on that. And whether or not the foreign country can tax your social security or your IRA withdrawals is also something to discuss with them.
