I am very curious abour how taxes are calculated and levied on US Expats with respect to retirement pension income, either from Federal pensions or IRA distributions. I think this is a good question to hash out, as I know a lot of folk are considering moving to cheaper places for a variety of reasons, healthcare probably being the big one.
Here is the scenario. At the moment it is hyperthetical. Because I am only 52, but it is a good time to start investigating.
Husband and Wife work for 20 years in the USA, both are citizens. During this time they amass a small fortune in their combined 401Ks which they convert to IRAs. Not Roth. They retire to another country and want to take distributions. Which country are the distributions taxed in? Does the USA levy taxes on the distributions if the persons are living abroard? The Country of residence will want their cut as they see it as income.
US Citizens are entitled to earn $80k each I think before taxes are levied
? But I thought this is limited to income earned outside the USA.
I know there are people here that live abroad, and I am curious if they understand the rules on this. as I don't.
Thanks in advance,