IRA contributions while working overseas
US citizen working in Europe, paid in local currency and participates in their retirement plan. In other words, it is not an ERISA covered plan.
If income limits are met, can client deduct IRA contributions while also participating in host country retirement plan?
Permalink Submitted by Alan Spross on Wed, 2012-04-18 00:53
Yes, they can deduct a TIRA contribution. However, there are NO income limits to be concerned with here other than having enough earned income to cover the IRA contribution,
The plans under which “active participant status” requires max MAGI amounts are those under Secs 401, 403, 408k, 408(p), and 501(c) of the tax code. The foreign retirement plan would not be subject to those US tax code sections.
Permalink Submitted by Peter Lingane on Wed, 2012-04-18 01:25
“Compensation” for IRA purposes is foreign earned income less any foreign earned income or housing that were excluded from income when you filed your US tax return.