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Deductions & credits
I need to bring in an international tax expert @pk
My general understanding is as follows:
First as a baseline, if you are living in the US and either have a green card, dual citizenship, or pass the substantial presence test, you must file a US tax return that reports all your world-wide income. If you are also required to file a return in another country, you can sometimes claim a credit or deduction for foreign taxes paid on the same income (if there is a tax treaty between the two countries.)
Now, regarding benefit accounts, and IF there is a tax treaty between US and the foreign country, there are special rules related to US Social Security, and foreign benefit payments that are deemed similar to US Social Security (government social benefits, or government mandated private investments that act like government benefits.) The general rule is that if you receive these types of government social benefits from another country, you have two options.
1. Follow the tax treaty. Your foreign government benefit is taxed in the foreign country according to their laws (including their laws for ex-pats) and then you leave the foreign benefit off your US tax return.
2. Ignore the tax treaty, and report the income as taxable in the US.
Whether you pick 1 or 2 depends on the different tax rates, and how easy it is to avoid any foreign taxes you might have to pay in the foreign country. If you can't avoid those taxes either way because of how they enforce their tax laws, you are probably better off with #1.
I don;t know if the specific account you are talking about meets those rules. Hopefully our expert will know more. @pk