How to report a distribution from an Australian Superannuation fund for a duel US/ Australian citizen ?

[pk]

@aussiebobaustin , understand your position .

(a)  We are here to help but the decision / filing and standing behind the  declaration ( filing ) is definitely ONLY yours, no matter whom prepares your return.

(b) Whether an income is  taxed by the USA is per the US laws and as modified by any tax treaties in effect at the time of filing.  However, you as a filer / tax payer  MUST declare each and every income for the tax year  unless  specifically  excluded by tax code.  Thus  you will need to declare this income from Australian source and then  either pay tax on it  or exclude  from taxable income by using treaty assertions ( form 8833 ).

Good Luck.

If you need further help / explanation, please feel free to either extend this thread  or start a new one.

pk

[aussiebobaustin]

Thanks PK,

I am requesting  Australian tax forms from the Superannuation company  that relate to the withdrawal I made.

These forms will indicate if any or none of the withdrawal  is subject to Australian tax.

Past communications with the Superannuation company indicate there  may be forms but not available now.

The Australian tax  year ends around the middle of the calendar year so I may not have forms  by the time 

I file in the US for 2024 ie April 15 2025.  I think this is OK.

What I don't really understand is the choice I have ,  you mention I can file a form or take advantage of the Treaty ... it seems to me that it may be more straight forward  to file the Australian taxes to pay taxes in Australia  if I have  taxes owed there ( I don't think I do but need to prove it ).   

Then I  believe I am done based o the Treaty ... correct ?

Thanks Bob.

[Opus 17]

Let me try and make this clear.  But I can only talk about the US.

In the US, the IRS assumes all income is taxable, unless you can prove otherwise.  Because of the tax treaty, you have two options on your US tax return.

1. Declare the super income and pay US tax on it along with all your other income.

2. Declare the super income and then claim exemption because of the tax treaty.  (You will still pay US tax on your other income, of course.)   In other words, you have to show the income, then claim exemption.  You can't ignore it.  (Like math class in school, you have to show your work.)

But, if you rely on the treaty to make the income exempt in the US, then you must follow Australian law to pay any tax that might be owed under Australian law.  Relying on the treaty means you are telling the IRS "this is not taxable in the US because I am following Australian law regarding this income."  So you need to follow through and do that.  The Australian tax might be more or less, I have no idea.  But your choice is to pay all tax in the US, or claim the treaty to skip the US tax, but if you claim the treaty, you have to do whatever Australia says you must do.

[pk]

@aussiebobaustin ,  sorry for the confusion .  If you choose to not have to pay US taxes on this Australia sourced income i.e. keep the income from US taxable income while still meeting your burden of declaring work income for federal purposes:

(a)  You enter this  income  as  pension  ( whether paid  at regular intervals or  total ) .  You can use a dummy 1099-R  ( your  particular version of TT may allow you to declare  pension with not 1099-R ),  use  pension  distributor name ( what it is ),  , EIN  as  00-0000000 or an arbitrary number like 12-1234567 -- an obviously fake # ,  provide all the  distribution agents name address etc. as actual, Distribution amount in US$, Taxable amount as the same as  Distribution amount, No taxes withheld and select code  that applies   etc.  Note that you can down load a copy of  1099-R from  www.irs.gov and use this as reference while  providing answers to TT.

(b)  Then  from the forms tree choose  form 8833.  Fill this out as to the  distribution amount and  include the treaty article under which you are claiming non-taxability by US.  This should result in  a negative amount showing on  Schedule-1 and thus reducing your US taxable amount.  See here for the form and instruction for 8833-->

About Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) | Internal Re...

Thereafter  i.e. after filing and acceptance of your return  for processing by the IRS, you are done for the year.  Note that your State of residence may or may not tax this amount.

(c) Because of this  exclusion , there is a general assumption that you file proper paperwork for Australia to  have the chance to tax this income. Whether they do or do not is up to them.  I also do not believe  that IRS  would actually vet  that you have filed a return in Australia but there is always the chance that  the IRS  would audit the return for compliance and within the next  three years.

Hopefully the situation and the paths are clear now  -- the choice is yours.

I do not believe  I can provide any more  info on this  open board.   If you have any specific questions etc. that that may not be of interest to the general posters/users, please consider  PM me  ( obviously  no Personally Identifiable Information).

regards, 

pk

[aussiebobaustin]

Thanks PK,  I appreciate your help .  I will work on this for my 2024 taxes with Turbo Tax.