Domestic Taxes Crack Expatriate Nest Eggs

Physician's Money DigestNovember 2005
Volume 12
Issue 15

Wall Street



Living and working overseas has itstradeoffs. There are different rules andinfrastructures to work with—from socializedmedicine to less litigation-friendlycourt systems. At the end of itall, returning home to theUnited States with aretirement fund canbe tricky. While topexecutivesare oftenoffered ample compensation and assistancein retirement funding, chances arethat a physician working abroad may notbe given the same package. A article points out that in mostcases, retirement plans overseas don'tcome with the tax shelters that 401(k)plans and IRAs have domestically and,regardless of residency, US citizens stillowe US taxes. Advisors suggest payingtaxes annually to avoid being hit with alarge sum upon retirement and to paytaxes at a lower tax bracket. Also, notethat foreign pension and retirement plansusually can't be rolled over into IRAsbecause they don't qualify under US taxcodes. Expatriates are allowedmore deductions than domestic employees(up to $80,000 of annual salary and$12,000 of annual housing expenses).

Related Videos
© 2024 MJH Life Sciences

All rights reserved.