Benefits in my Backyard: Living outside the U.S.

This is not America, (sha la la la la)

Jonathan Kaupanger
August 10, 2018 - 3:32 pm

Dreamstime

Retiring abroad is a great option for veterans. Most often, they’ll have a guaranteed pension on top of their social security benefits. This can mean a veteran can retire in relative wealth compared to most Americans. Many countries, particularly poorer ones have formal retirement visa programs with reduced or no taxation for retirees on a pension. Generally, you must not have a criminal record and you’ll need to show proof of your pension. Many countries require proof that you have private healthcare too. 

Taxes

Living outside the country can be great, but that doesn’t mean you’re exempt from paying taxes. Here’s a few tax tips to think about during tax season.

  • Account for ALL of your income. You have to report all of the income you’ve earned within the past year, even if it’s foreign income. If you have a foreign bank account with assets valued at more than $10,000, you’re also required to file a Foreign Bank Account Report (also called FinCEN Report 114).  This report can only be e-filed through the Financial Crimes Enforcement Network, which is part of the U.S. Treasury Department.
  • Take advantage of the automatic filing extension. Most Americans living abroad during tax season automatically qualify for an extension.  That means you have until June to get your taxes done. If you have to turn in a Foreign Bank Account Report that’s due by June 30. If needed, file Form 4868 and if accepted your tax return will be due on Oct. 15.
  • Pay your taxes in April. Even if you’re not filing taxes until June or October, it’s a good idea to pay taxes you owe by the April deadline. If not, you’ll pay a penalty and interest on top of your unpaid taxes.
  • Use the right exchange rate. If there are individual business transactions that took place on specific days, you can use the exchange rates from those specific days. If you received foreign income over a period of time, use the yearly average exchange rate to convert into U.S. dollars.
  • Avoid double taxation. You might be able to claim the Foreign Tax Credit for all or part of the foreign income taxes by filing Form 1116. Or you might be able to deduct your foreign income when itemizing your deductions.
  • IRS International Services

Education

  • Foreign School Information for Students. To be eligible for training in a foreign school, you must meet the same basic requirements as for training in the U.S.  Before enrolling:
    • Determine if your program of education is approved for VA benefits. If you’re unable to get this information from your school, submit a question to VA here.
    • Make arrangements with the school for acceptance, enrollment, payment of tuition and fees and for any other requirements such as living accommodations.
    • Make arrangements for travel including your passport, visa, and vaccinations as required.
    • Maintain a sufficient financial reserve to care for all of your needs until VA educational assistance allowance payments begin.
    • Some countries have their own version of the Privacy Act. Students attending schools in these countries should furnish written permission to school officials allowing them to release information as necessary to VA.  Failure to do so may affect your VA benefits.
  • Your claim will be processed in a different office, depending on where you’re attending school.
    • If you’re attending school in Puerto Rico or the U.S. Virgin Islands, your claim will be handled by the Atlanta Regional Processing Office.
    • If you’re attending school in the Republic of the Philippines, American Samoa, Guam, Midway, Wake Island, any of the islands in the Federated States of the Marshall Islands, the Republic of Micronesia or the Republic of Palau, your claim is processed by the Muskogee Regional Process Office.
    • For schools in any other foreign country or area, your claim is processed by the Buffalo Regional Processing Office.

Housing

  • Specially Adaptive Housing is available for veterans living overseas. You must have a substantial ownership interest in the home to be adapted or built. See VA’s Specially Adaptive Housing webpage for more information and how to apply.

Cemetery and Burial

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