Social Security for expats

[robiemartin]

Hi all, I know I've seen a thread about this but can't find it. What happens with social security/medicare if you work overseas for 10-15 years and don't pay in?

[Check 6]

Robie, I have been working overseas continuously for 6+ years. You are required to pay into SS and Medicare, but most, if not all, of your income will be IRS tax exempt.
You must also file IRS tax returns every year and also state returns, depending on where you claim your residency. Florida for example does not have state income tax, so I do not have to file (Florida resident).

[robiemartin]

Thanks for the info. If I leave the states I will be selling my house. Am I stuck with my previous state for purposes of residency?

[Flying Aggie]

you will tax exmept for only $80,000 and pay tax on the rest if it over. but you still have to file every year if you are US Citizen or a green card holder.

Flying Aggie

[Check 6]

The state of residence is only a "state" tax issue when you are overseas. I changed mine from Calif. to Florida while overseas. Florida in most cases does not require filing, so I just stopped filing state taxes, only IRS.

There are two methods of establishing your expat status:

1. Out of the U.S. for 330 days out of any 365 days; note this is not a calendar year, but a floating 365 day period.

2. Establish a residence overseas, i.e. an address. This is the method that I have been using because I return to the U.S. in excess of 35 days/year. I highly recommend selecting this method.

Note: You can have multiple residences overseas. This is useful if you for instance have a work residence at one location and stay in another location when on your off cycle. You can claim expenses for both. This is important if you exceed $80K income overseas, and/or have income derived from the U.S., such as capital gains, rental income, military retirement, etc.

Note: only the income that you receive from work overseas falls under the exemption.

I highly recommend that you go to the IRS web site and read their booklet on living and working overseas. You will then have the facts from the IRS, as I AM NOT an accountant or tax adviser.

If you need additional tax deductions in the event that you have taxable income, consider claiming expenses of returning to the U.S. Categories that have worked for me are: job searching; medical treatment (I claim the mileage!).

Both Turbotax and the HR Block program work great when in an expat status. I have been using both for five filings and have never been audited while overseas.

I hope this helps,

Check 6

Naples, Italy, but moving to the U.S. on the 18th.