US Citizen living abroad
Can a US citizen living in a foreign country make contributions to an IRA or a Roth IRA. I work for a foreingn company and I am paid in their currency. I still file US tax returns and pay some US income tax because of my income. If yes, how much can I contribute.
Thanks
David
Permalink Submitted by Alan - IRA critic on Mon, 2019-09-23 17:21
First, you must have earned income reportable on your US Return in excess of the amount you can claim as a foreign earned income exclusion. While the FEIE would normally lead to making a Roth contribution, the FEIE might either eliminate your earned income OR result in your exceeding the MAGI limit to make a Roth contribution since for purposes of the MAGI calculation, the FEIE must be ADDED BACK to your AGI. The result is a narrow income range in which people in your situation can qualify for a Roth contribution. You can contribute the usual 6000 plus 1000 catch up if age 50+, subject to the income limits. If you cannot contribute to a Roth, if you do not have a non Roth IRA, you might be able to do a back door Roth (ND TIRA contribution, then convert).