Roth vs Traditional IRA for taxpayers abroad with foreign excluded income

[Taxing Matters]

Retirement accounts are different. Not in that they aren't subject to FBAR and FATCA, they are. It's that very few US taxpayers realize that under US law that they AREN'T the same as an IRA or 401(k). Thats a whole other realm of reporting. I've lost track of people who even participate in government mandated retirement programs who are stunned to find out that not only is the income inside the plan not deferred with the US, but that employer contributions are income, and they may even have 3520 requirements.

I don't disagree, but if the OP already has assistance with the reporting requirements for other accounts I do not see that the additional cost of reporting these retirement accounts would be that onerous.

That clients don't understand that the taxation of foreign government retirement plans is not the same in most cases as for qualified plans in the U.S. is another kettle of fish, as they say. And you are quite right, some don't. All the more reason U.S. persons living abroad really do need to consult a tax professional who is familiar with the tax rules that apply to citizens/residents abroad.

 

[ahos]

Thanks for all of the helpful comments!