US: Pension tax relief sought for all Americans abroad
12 November 2014
Posted by: Author: Mike Swire
Author: Mike Swire (Tax-News.com)
taxpayers newly able to easily secure more favorable US tax treatment for
Canadian retirement plans, American Citizens Abroad had requested that such
treatment should be extended worldwide to all foreign pensions and retirement
Under the recent
change, many Americans and Canadians with registered retirement savings plans
and registered retirement income funds now automatically qualify for tax
deferral under the US-Canada double tax agreement, similar to the treatment
available to participants in US individual retirement accounts and 401(k)
pleased to see that the IRS has simplified the filing procedure for recognition
of Canadian retirement plans so that they are easily and immediately treated as
'tax-free' savings and as the equivalent for US tax filing purposes,"
stated Jackie Bugnion, ACA Tax Team Director.
ACA has long
recommended that the IRS 'correct' the tax treatment of foreign pension and
retirement savings plans. Until a change occurs, both individual and company
contributions to foreign plans are generally taxed as income.
increases the tax burden for Americans overseas who are mandated in many cases
to contribute to these plans in the foreign jurisdictions where they
work," Marylouise Serrato, Executive Director of ACA, added. "The
increased tax burden can be significant as plans providing deferred taxation by
foreign countries are immediately taxed by the US."
The ACA has
therefore urged Congress to extend automatic recognition for foreign pension
and retirement savings plans throughout the world. "Reducing the double
taxation burden caused by foreign retirement plans would make it easier for
Americans to compete in overseas markets," Serrato concluded.
This article first appeared on tax-news.com.