# Tax questions



## Shaka (Jul 6, 2013)

I'm sure that the answers to my questions are somewhere in the forum but I just need an answer to a specific question. When I retire to Italy will I need to just pay taxes in the USA on earned income from investments and pension and pay nothing in Italy unless I work there? I am an EU and a Us citizen.There is so much stuff out there I'm confused.
Thanks in advance.


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## Guest (Jan 10, 2014)

I'll shift this to the tax board, you'll get loads more answers there.


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## BBCWatcher (Dec 28, 2012)

Yes, you'll pay U.S. taxes first on U.S. source income. The possible exception is U.S. Social Security. If you are a citizen specifically of the U.S. and Italy then, per treaty, the U.S. will not tax those Social Security benefits but Italy can.

You will also need to file an Italian tax return including Form RW. Form RW is Italy's version of the U.S. FBAR form but much more detailed. You should be able to credit U.S. taxes paid against your Italian tax liabilities (if any).

The U.S. and Italy have a tax treaty. In general U.S. tax advantaged retirement accounts (notably Roth IRAs) are respected in Italy via the treaty.


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## Bevdeforges (Nov 16, 2007)

Italy has a very specific (and slightly unique) provision in their tax treaty with the US regarding Social Security. (You can check the IRS publication on Social Security benefits (publication 915). The US won't tax your US Social Security at all if you have Italian citizenship and are resident in Italy while receiving your social security benefits.

There is also, apparently, a system in Italy for the banks to simply withhold taxes on certain types of interest and dividend income, and you don't even need to file a return or declaration at the end of the year. (Depends, obviously, on having an investment account of some sort set up in an Italian bank.)

You will continue to have to file US taxes - declaring your worldwide income - as long as your gross income exceeds the filing threshold.

Sounds a bit daunting, but once you get settled in and working within the system, it all falls into place fairly easily.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Yes, and Italy generally exempts approximately the first 7,500 euro of pension income from income tax. But the rates above that are generally higher than U.S. income tax rates, so for many/most Italian citizens resident in Italy receiving U.S. Social Security benefits the treaty doesn't seem to provide substantial (or any) benefit. Your mileage may vary.


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## FFMralph (Dec 22, 2012)

@ Shaka: You said in your original post "Pension". If you have pensions other than Social Security, they will probably be reportable in both the US and in Italy. Usually, the treaty does not cover employer pensions or insurance payments. If you do have to pay Italian tax on These other pensions, you can use the FTC to Offset the US tax.


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