After 38 years working in the US, now retired and living fully out of the country, no intention to return at least for the time being and no intention to work again being at 72. So far I have been paying taxes on my Social Security and monthly State pension. Taxes are deducted outomatically from my checks. If yes, the question is why? And if no, the question is how to stop paying taxes to the IRS annually. I am also paying taxes on the interest of my savings account which is still in the US banks. What to do to stop the taxes being deducted and if possible can I refraine from Submitting my incom tax forms every year? Please advice what to do how to proceed and where to go. Thanks. bb.
2007-06-09 00:14:23 · 4 answers · asked by Bill B 1 in Business & Finance ➔ Taxes ➔ United States
Thank you for your prompt answer, I missed indicating that I have a duel citizenship. Now I am living in the other country. Does your answers apply on such case, also even if I will not work or live in the States any more? Please what is the solution to avoid all the taxing. Thank you. bb.
2007-06-09 06:45:29 · update #1
Since you are a US citizen, the fact that you reside outside of the United States does not change your tax obligations on your income.
Unless you are subject to backup withholding, you can change the withholding on your Social Security checks by re-filing Form W-4V:
http://www.irs.gov/pub/irs-pdf/fw4v.pdf
The bank would take taxes out of your interest only if you are subject to backup withholding or if you voluntarily requested withholding. If you are not subject to backup withholding, you can fill out Form W-9 for your financial institution and taxes will not be withheld:
http://www.irs.gov/pub/irs-pdf/fw9.pdf
Unless you are exempt from income taxes and backup withholding, your pension is required to withhold taxes. Contact them if your withholding is inaccurate or you wish to change it, in particular after the withholding from SS and/or the banks is discontinued.
Even if taxes are not withheld, you will still be required to file an income tax return if your income is above the income threshold for your filing status. If you do not have more than $10,050 in income other than your Social Security benefits, then you would not be required to file (the figure is $19,600 if you are married and your spouse is over 65, $18,550 if under 65).
2007-06-09 03:40:30 · answer #1 · answered by ninasgramma 7 · 1⤊ 0⤋
Definitely - the previous answers are all on the mark, the only added info I would offer is a possible concern about state income taxes. Are you registered to vote? If so, that may indicate a permanent domicile, do you maintain a safe deposit box, membership in a church congregation - thiese may add to a finding of permanent domicile. If you left a state with an income tax - be aware and investigate the issue
2007-06-10 09:10:55 · answer #2 · answered by Malcolm K 2 · 0⤊ 0⤋
You can not avoid the Federal Income tax. You may be able to avoid state income tax since you do not live in that state. Another means would be to change your home state to a state that does not have state income tax, like Texas or South Dakota.
2007-06-09 12:47:41 · answer #3 · answered by ? 6 · 0⤊ 0⤋
All US citizens and residents are subject to US taxation on their world-wide income regardless of where they live. That includes retirees as well.
2007-06-09 07:22:18 · answer #4 · answered by Bostonian In MO 7 · 1⤊ 0⤋