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Old 04-23-2014, 01:12 PM   #21
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I was trying (unsuccessfully) to make a point that it's easier to give an opinion when a person doesn't have anything riding on it.
I am in your wife's situation, so I have something riding on it as you put it. Becoming a US citizen for financial reasons makes little sense to me, especially if one does not intend to stay in the US permanently. If you move back to Europe, your wife will have to deal with tax complications for the rest of her life and risks being blackballed by the financial system (FATCA) while living in her own country! Personally, I would not want those shackles. I would rather make plans in case I became ineligible for SS. Even if you stay in the US, plenty can happen to your wife's SS benefits. Spousal benefits could be reduced or eliminated for example. Or by the time you reach full retirement age, you SS benefit might have lost a lot of purchasing power if the government changes the way SS benefits are indexed for inflation for example. So personally, I am going for a well-padded nest egg and crossing my fingers.
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Old 04-23-2014, 01:58 PM   #22
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I am in your wife's situation, so I have something riding on it as you put it. Becoming a US citizen for financial reasons makes little sense to me, especially if one does not intent to stay in the US permanently. If you move back to Europe, your wife will have to deal with tax complications for the rest of her life and risks being blackballed by the financial system (FATCA) while living in her own country! Personally, I would not want those shackles. I would rather make plans in case I became ineligible for SS. Even if you stay in the US, plenty can happen to your wife's SS benefits. Spousal benefits could be reduced or eliminated for example. Or by the time you reach full retirement age, you SS benefit might have lost a lot of purchasing power if the government changes the way SS benefits are indexed for inflation for example. So personally, I am going for a well-padded nest egg and crossing my fingers.
More complicated taxes I can see.....since we would both have to submit taxes in both countries. From what others have told me, ours would still be a fairly simple (whatever that is in reality) tax situation. Not a lot of money, and not a lot of money coming in from pension/savings. Although....either way.....wouldn't she have to do US taxes if she were receiving US Social Security? Oh well....still time to drive myself nuts over it before we commit one way or the other.

Thanks for all comments/opinions.....all are welcome.
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Old 04-23-2014, 02:06 PM   #23
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Although....either way.....wouldn't she have to do US taxes if she were receiving US Social Security?
No, not if she were an NRA; resident in the UK; and the US SS was her only source of US income.

Caveat: this is, again, due to the fairly unique US/UK Double Tax Treaty. Only 8 or so other nations have this arrangement with the US.
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Old 04-23-2014, 02:14 PM   #24
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No, not if she were an NRA; resident in the UK; and the US SS was her only source of US income.

Caveat: this is, again, due to the fairly unique US/UK Double Tax Treaty. Only 8 or so other nations have this arrangement with the US.
Ooooooo, that's could be a game changer then. Thanks.
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Old 04-23-2014, 02:26 PM   #25
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Ooooooo, that's could be a game changer then. Thanks.
If she is an NRA (not a US Citizen), she would not be required to file a US tax return if her only source of US income is US SS. She would also only pay tax on the US SS amount to the UK (HMRC), and none to the US (and none would be withheld by the SSA).

If she is a US Citizen, she would be required to file a US tax return (if she met the threshold, but in this case, you would probably file MFJ). She still would not pay any tax to the US on the US SS amount, and would only pay tax on the US SSA pension to the UK (HMRC).
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Old 04-23-2014, 03:11 PM   #26
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If she is an NRA (not a US Citizen), she would not be required to file a US tax return if her only source of US income is US SS. She would also only pay tax on the US SS amount to the UK (HMRC), and none to the US (and none would be withheld by the SSA).

If she is a US Citizen, she would be required to file a US tax return (if she met the threshold, but in this case, you would probably file MFJ). She still would not pay any tax to the US on the US SS amount, and would only pay tax on the US SSA pension to the UK (HMRC).
These kinds of things might also dictate where we move our money to as well. I would likely stick with the TSP money in my name, but then couldn't I move what would be left of our Vanguard money into her name only (with the appropriate Vanguard ETF's). Until she hits 67, she wouldn't even have to leave the UK Personal tax allowance on small withdrawals of money from that. I could just take any money we needed out of the TSP (and pay the minimal tax on that...15%).
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