I need to report foreign retirement from a private entity that is received in a foreign country (Jordan) as income, and deduct a amount that was paid towards foreign social security contributions; the money received are deposited in a bank account in Jordan, what is the best way to do so, or what IRS publication can I refer to ?
I assume you are a US citizen or US resident. You will need to report foreign pension income on your US tax return. If you did have to pay tax on this income in Jordan, you can claim a foreign tax credit to help offset double taxation.
You will not be able to deduct your foreign social security payments on your US tax return.
The easiest way to report this income is to convert it to USD and then enter it as miscellaneous income.
Click on Wages & Income at the top of your screen
Scroll down to Less Common Income, and the last item , Miscellaneous Income and click on start
Scroll down to Other Reportable Income and click Start
Enter your retirement income and description
If you paid foreign tax on this income, enter it in the foreign tax credit section of TurboTax
Enter foreign tax credit in the search box and click on the Jump to link
Also, you may need to file one or two foreign financial information forms, Report s of Foreign Bank and Financial Accounts (FBAR) and/or Form 8938, Statement of Specified Foreign Financial Assets.
Comparison of Form 8938 and FBAR Requirements
The Taxation of Foreign Pension and Annuity Distributions