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  1. #1
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    Default U.S. income tax HELP

    anyone have any ideas on how to reduce your taxable income. I live on a pension from my investments. Just did my taxes and owe 6,000 dollars. That is 28% of my yearly pension.

    Are there any special deducations for those living abroad ?

  2. #2
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    Wink From where do you hail

    Quote Originally Posted by Capt. Rob57 View Post
    anyone have any ideas on how to reduce your taxable income. I live on a pension from my investments. Just did my taxes and owe 6,000 dollars. That is 28% of my yearly pension.

    Are there any special deducations for those living abroad ?
    Capt Rob

    I have read some of your posts, but really do not recall from where you hail.

    If you are US Citizan, and you live abroad for more than 11 monthes per year you are allowed up till 80,000 plus dollar deduction, depending how you file.

    So that is much more than your 20k somthing pension, not know what your additional income may be, you would pay nothing.

    By the way, someday I plan to take up your offer for fish for gas money as soon as fuel prices come down a bit.

  3. #3
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    Default

    as i understand the 80,000 deducation it is for earned income. as in gainful employment.

    as for the gas usually around 2-3 thousand pesos depending on how long and far we go.

  4. #4
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    Quote Originally Posted by Capt. Rob57 View Post
    as i understand the 80,000 deducation it is for earned income. as in gainful employment.

    as for the gas usually around 2-3 thousand pesos depending on how long and far we go.
    I understand that this is income gained from non US sources

  5. #5
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    HERE IS MY SENICERO, my family owned a corp. for 50 years my mother sold it. All the taxes were paid by the estate. my mother died last year so the TRUST was split three ways between my two brotheres and myself. My part of the trust is in my name and invested into a Schwab account. I have no other income except the interst i recieve off my Schwab account. Which is 2,333 dollars per month. That is why I was shocked to here from the tax person my brother uses for his ranch how much I owe. I mean I live almost proverty level in the states and have to pay 28%. What is going to happen next year ?

  6. #6
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    Default

    Quote Originally Posted by Capt. Rob57 View Post
    HERE IS MY SENICERO, my family owned a corp. for 50 years my mother sold it. All the taxes were paid by the estate. my mother died last year so the TRUST was split three ways between my two brotheres and myself. My part of the trust is in my name and invested into a Schwab account. I have no other income except the interst i recieve off my Schwab account. Which is 2,333 dollars per month. That is why I was shocked to here from the tax person my brother uses for his ranch how much I owe. I mean I live almost proverty level in the states and have to pay 28%. What is going to happen next year ?

    If what you say is true and it is really what you got from your ... well... farthers ...after working all your life - it is SHAME!

  7. #7
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    get a new tax guy

  8. #8
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    Default Wud said......

    or restructure if you're paying 28% on under $28,000 inearned interest!
    I'm not sure of US rules but I have a lot of my retirement capital in investments that pay dividends or capital gains rather than interest to take advantage of Canada's less than generous tax rules.
    I always thought US taxes were lower than ours but 28% on interest sounds rather high with no other source of income!!

  9. #9
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    Default You may have overpaid

    Quote Originally Posted by Capt. Rob57 View Post
    HERE IS MY SENICERO, my family owned a corp. for 50 years my mother sold it. All the taxes were paid by the estate. my mother died last year so the TRUST was split three ways between my two brotheres and myself. My part of the trust is in my name and invested into a Schwab account. I have no other income except the interst i recieve off my Schwab account. Which is 2,333 dollars per month. That is why I was shocked to here from the tax person my brother uses for his ranch how much I owe. I mean I live almost proverty level in the states and have to pay 28%. What is going to happen next year ?
    I ran your numbers through TaxCut software with annual interest income of US$27,996 and no other income or deductions. Using the standard deduction and filing as single, the software says you owe federal tax of $2,521. If nothing was withheld during the year, you may also owe a small penalty. Don't have enough info to calculate state tax.

    I'm not an accountant so take this for what it's worth. A couple of things would change the tax amount:
    1. If some of your income was from dividends i/o interest
    2. If some interest was from tax exempt sources
    3. If the assets you inherited appreciated between the date of your mother's death & the date you received them
    4. If you or the executor sold any assets in 2006.

    Some of these events (#1 and #2) would actually reduce your tax. Most of these events would cause you to receive additional tax documents (besides a 1099-INT) from Schwab or the executor. If the only document you received was a 1099-INT, I agree you should get a new tax person.

    Hope this helps.
    Ben

  10. #10
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    Hi Capt...

    Not being a tax accountant, I have very few FACTS to offer. BUT, an IRA is not an option for with no "earned" income...bux derived from a J O B....in the States... dividends, inheritances, etc., don't pass muster. Ya didn't "earn" it...it just came diddly-bopping by.

    Since the bux you may earn in DR is not taxable, until ya get to some high amount, I seriously doubt you could contribute to an IRA. It (your DR bux) was not taxed in the first place...an IRA is used to defer taxes 'till you're 70 and a half. You can't defer what ya never paid....

    Jump on IRS website on the net and you'll get the straight skinny if you're willing to pour thru boatloads of stuff.

    Better still, get ya a good tax accountant in the US...your situation is not that complicated....

    If he/she wants more than $500 bux for the info, not for total return work, tell him to bark at the moon...

    Ol' Phil

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