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Suella

I noted TMF's reply and posted a similar question on this thread in December as I live in Hong Kong and was looking into whether I could get an IRA. Since I use the 75,000 dollar exclusion, I basically cannot.

But two things to check into are:
1) You are required to file on any income, as you know. And required to pay US tax on income earned over 75,000 USD.....so I don't know if that income can go towards "earned income," eg income eligible for a Roth IRA/IRA. Something to look into IF you earn more than 75,000 USD. Example: if you make 100,000 USD/year, then you must pay US tax on 25,000 of that income. You can offset the taxes by claiming the UK tax you paid on that income, but is it still IRA eligible income? Does this count?

2)On the same line of thought, and this is only a guess, but it would occur to me that if your salary is in the range where UK taxes are high (say over 45,000 pounds sterling--about 73,000 USD), then you might look into claiming all your income WITHOUT the exclusion. Assuming you will be able to offset UK tax against US tax, you might come out ahead in the long run---BUT there might be a limit to this offset, so please look into it first. If you did this, then I would think you'd be able to take advantage of other US tax deductions and an IRA offer....I think....consult an accountant on that one...

note: this post is in theory only and I'm curious to find out myself if this would work for us American workers outside the States.

thanks to anyone who can add addition info on this.
cheers,
p-chan
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