Expat IRA guidance needed

Submitted by Moshe Foster on Thu, 2017-03-30 13:24

Hi everyone,

I would greatly appreciate direction and guidance on this issue.

I am a US citizen working abroad as a teacher. I am federal tax exempt on my earnings because they are below the foreign earnings exemption limits.

This disqualifies me from starting an IRA in the US.

What options do I have in resolving this issue and who is best qualified to inform me of my options?

I am currently searching for a CPA who has experience in assisting others in similar circumstances.

Thank you for your help!

M



Submitted by William Tuttle on Thu, 2017-03-30 14:10

You need to have taxable compensation to make an IRA contribution. If you use the foreign earned income exclusion and this causes you to have no taxable compensation, no IRA. The exclsuon is all or nothing. You can try, but I don’t believe a CPA or anyone else is going to give you any other options.



Submitted by Steve Hagedorn on Thu, 2017-03-30 14:48

There’s an exception to the rule that the income has to be taxable: nontaxable combat pay is qualifying income for this purpose.

  • Not sure if you are teaching within the DOD (Dept of Defense) system regarding your job and, if you are, whether your income would be considered ‘combat pay”. Most teacher would agree the classroom teacher is always waging a war on ignorance.


Submitted by Steve Hagedorn on Thu, 2017-03-30 14:58

You may be able to contribute to an HSA (Health Savings Account) IRA with no earned income so long as you have a eligible Health Insurance plan.



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