Spring is here, Easter is this weekend, and April starts next week, which for Americans may all serve as reminders of the April 15th (April 17th in 2018) tax filing deadline for US taxes.
Even if you are taking an extension to file your 2017 US tax return, remember that you may still need to make a tax payment by the April 17th deadline, and also need to open and fund any IRA account contributions by the April 17th deadline. This is one of the most important checks I do every year with Americans working overseas to make sure they are saving enough for retirement.
Many Americans working overseas are eligible to contribute to IRAs, but very few actually do it. The main requirement is that you have un-excluded earned income, which as a generally rule means that if you send any US tax payments back to the US, you are probably eligible to contribute to an IRA. If you are married filing jointly with an AGI less than US$189,000 in 2017, you can also contribute directly to a Roth IRA, otherwise you can take an up-front tax savings on a traditional IRA contribution and do a “back door” Roth conversion later. It is also worth checking if you have a 401k to rollover, or if your employer will let you make a SEP-IRA contribution of up to US$55,000 (10x the contribution and 10x the tax savings of a traditional IRA).
Finally, if you know a fellow American that happened to turn 70 1/2 last year, remember that April 1st (not April 17th) is the deadline for making the first required minimum distribution (RMD) from their traditional IRA accounts.
Happy Spring!
Tariq
+852 9476 2868