Thank you! I am actually asking for my adult child.
a) She is U.S citizen
b) Her Legal permanent residence is New York State, living in Dubai working for Dubai based organization. There is no income tax there.
c) The Retirement Benefit Payment is an employer's good deed - part of the benefit package. The payment goes into a brokerage account in the employee's name - it is not an IRA or 401K -and not tax deferred. I would say taxed when contributed BUT - since all her incomes qualifies for the Foreign Income Exclusion, she does not pay any U.S. Federal income tax. She receives a 1099 each year on the dividends and income generated by the account. It is my understanding when shares are sold, tax is payable on any increase in the share's value.
d) She plans to use funds for her retirement.
e) She is not contributing to Social Security - Foreign employer does not pay into Social Security - and her earned income qualifies for Foreign Income Exclusion - so as I understand it, her only taxable income is the 1099s she receives on her interest and dividends (From the retirement account and elsewhere).
I would GUESS the retirement benefit payment should be added to her basic salary and total entered under foreign earned income. TurboTax does have places to enter housing provided by employer, overseas differential, home leave, etc. - but I don't see a place to enter the retirement benefit payment made by the employer.
Thank you !
