One TaxAide "client" (a married couple, both US citizens) that I've had for years with a nice, simple, SS + some interest return showed up today for their appointment and told me "oh by the way, [wife] has started a getting an Irish pension".
Turned out years ago wife worked some time for the Irish military and
paid into its contributory pension plan. Either they tracked her down
or she tracked them down after hearing she might be entitled to a
pension and she started drawing it in 2010.
She got a lump-sum back payment of approx $9000 in June and then
started getting *dollar-denominated* checks of around $125/month (the
pension is constant in euros so of course the dollar amount
fluctuates). They didn't (to their knowledge) get any sort of 1099-R
for it (not surprising! :) and didn't bother to bring along the forms
they did get.
I did the return as if the full $9000 + (6 * $125) was taxable (which
left them owing $237) and gave them a completed 4868 and told them to
send it in with a $237 check and put the return on extension. I also
told them to get me a copy of the Irish pension forms they did get and
that I'd spend some time looking into it and that if it turned out to
be VERY straightforward I'd be willing to do the return, otherwise I'd
turn over whatever info I was able to find and tell them to see a pro.
Some questions I have...
* Are they going to be stuck using a pro going forward? This aside,
their return is truly trivial and it would be nice to be able to
keep doing it for them so they can get it done for free (sorry guys
* Is there any chance that any of this could be non-taxable?
I imagine that if whatever documentation the Irish pension board
sent her doesn't show the contributions made there'll be no choice
but to treat it as 100% taxable?
And even if contributions are shown, they would have been made in
punts (or whatever the pre-euro Irish currency was called) years ago
and so there's no way to know what the actual dollar amount of the
I suppose Ireland could report there were total contributions of X
euros (with it having done some punt-to-euro conversion), but then
what rate to use to convert that to a dollar amount? And is that
even allowable since you'd be using a current exchange rate, not the
exchange rate at the time of the pension contributions?
* Any relevant tax treaties in play?
* In software (TaxWise, specifically), how would this be reported?
One could try to use same 1099-R analogue the software has you use
to report pensions in general, but (presumably) there's not going to
be a payor EIN to put down on the 1099-R "form". Does that mean
they'll be permanently barred from e-filing?
Thanks for any info/pointers!
- posted 8 years ago
-- Rich Carreiro email@example.com