topic Re: Moving in Get your taxes done using TurboTax

Moving

osbuntax611 — Wed, 14 May 2025 23:49:52 GMT

I'm planning to move outside the usa. Do i still need to file taxes. I am currently collecting social security and i trade stocks. Thanks.

Re: Moving

KarenL4 — Wed, 14 May 2025 17:27:30 GMT

Yes, assuming you are a US Citizen, you still have to file taxes if you meet the filing requirements. Here's an article that should help you figure that out. Note: If your only income was social security, you would not have a filing requirement. However, when additional income enters the picture (e.g., interest, dividends, stock sales, other pensions), you may have a filing requirement and it's possible some portion of your social security becomes taxable. Here's something that explains that. This article also does a great overview on taxes for expats!

Hope this helps and enjoy your new home!

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Regards,

Karen

TurboTax Expert

@osbuntax611

Re: Moving

FranklinF — Wed, 14 May 2025 18:19:27 GMT

FIRSTLY, both U.S. citizens and green card holders, or lawful permanent residents, are generally obligated to file U.S. income tax returns and report their global income to the IRS for tax purposes.

SECONDLY, this global income encompasses earnings from both the United States and any foreign countries. The penalties for failing to file or report foreign income and assets can be quite severe.

LASTLY, it is beneficial to file taxes even when no filing requirement exists, simply to maintain current financial records. From personal experience, I have seen instances where taxpayers had to file up to three years of tax returns despite having no initial filing requirement due to circumstances that necessitated proof of income. Having tax returns on file significantly simplifies this process.

Kind Regards,
Franklin
TurboTax Expert

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Re: Moving

pk — Tue, 27 May 2025 18:53:43 GMT

@osbuntax611 ,

Agreeing with the excellent replies ( and the referred articles) from my colleagues @KarenL4 and @FranklinF , would just like to add the following:

(a) As a US person and even with a foreign tax home you are still subject to FBAR requirements -- form 114 at www.FinCen.gov and only on-line. There is no threshold change based on tax-home

(b) As a US person you are still subject to FATCA regs. -- form 8938 ( along with your tax return ).

See this --- Comparison of Form 8938 and FBAR requirements | Internal Revenue Service

Which country are you moving to ? I ask because of US/that country tax treaty considerations inclu. taxation of your US social Security by that country.

Is there more I can do for you ?

Re: Moving

osbuntax611 — Wed, 28 May 2025 16:01:52 GMT

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?

Re: Moving

pk — Wed, 28 May 2025 17:19:50 GMT

@osbuntax611

I am not very conversant with pensions/IRAs etc. My colleague @dmertz is generally best suited for such topics.

You can also see this from the IRS -- Hardships, early withdrawals and loans | Internal Revenue Service.

Generally, payments from public funds ( such as SSA ) are taxable only by the payor country. There is a tax treaty between US and Philippines in effect -- see article 19 & 20 of the treaty here -- PHILIPPINESWEB.PDF

Is there more I can do for you ?

Re: Moving

Opus 17 — Wed, 28 May 2025 17:52:31 GMT

@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-on-early-distributions

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.