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(I'm reposting this from the Ask a Foolish Question board per someone's suggestion)

I've been living outside of the US for the past couple of years but do plan to return at some point.

My employer is non-US, so I don't have a 401K or any other type of retirement vehicle.

Aside from irradically sending back money to the states to buy stock, I do plan on doing a Roth IRA this year. - someone on the Ask a Foolish question board warned me that I can only do an IRA if I have *earned income*. I get what I would consider the New Zealand equivalent of a W-2. I do file a US return and allocate all money out so I have no tax liability.

My question is what other tax deferred ways can I save money? Is the Roth IRA it so I'll be limited to a couple of thousand a year?

I was planning on using my stock purchases in my old age, but I'm guessing this is not the most advantageous from a tax perspective.

thanks for any advice
-flybuys
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Aside from irradically sending back money to the states to buy stock, I do plan on doing a Roth IRA this year. - someone on the Ask a Foolish question board warned me that I can only do an IRA if I have *earned income*. I get what I would consider the New Zealand equivalent of a W-2. I do file a US return and allocate all money out so I have no tax liability.

Actually, what you must have in order to fund an IRA is "taxable compensation." Since your earnings are not being taxed in the US because of the earned income exclusion, you cannot make an IRA contribution. See Publication 590.

My question is what other tax deferred ways can I save money? Is the Roth IRA it so I'll be limited to a couple of thousand a year?

I was planning on using my stock purchases in my old age, but I'm guessing this is not the most advantageous from a tax perspective.


Long-term capital gains are taxed at the lowest possible rate under current law. Aside from the fact that you have no other tax-deferred options for saving for retirement, this may actually be better than a traditional IRA, in which all gains are taxed as ordinary income. You don't give a timeframe, but if you have a long enough wait until you're going to be using the money, I think buying and holding stocks you like, even in a taxable account, is a good strategy.

Phil Marti
VITA Volunteer
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I do file a US return and allocate all money out so I have no tax liability.

What is the IRS Pub that deals with the requirements for U.S. ex-patriots to file federal tax returns and the foreign earned income credit? I think it's IRS Pub 593, Tax Highlights for U.S. Citizens and Residents Going Abroad, but I'm not certain.

David Jacobs
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Check the following for information related to US expatriates and taxes (from Pub. 593, Tax Highlights for US Citizens and Residents Going Abroad):

"Publications 54, Tax Guide for U.S. Citizens and
Resident Aliens Abroad, 514, Foreign Tax Credit for
Individuals, and 901, U.S. Tax Treaties, discuss in detail
the treatment of your foreign income, the foreign tax
credit, and the general tax treaty benefits available to
you.

Students or professors who receive income from
teaching or while studying abroad should also get Publication
520, Scholarships and Fellowships."

Ira
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What is the IRS Pub that deals with the requirements for U.S. ex-patriots to file federal tax returns and the foreign earned income credit? I think it's IRS Pub 593, Tax Highlights for U.S. Citizens and Residents Going Abroad, but I'm not certain

AFAIK that's the one.

Phil Marti
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