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Taxes on US earned retirement $$ ?

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HoustonTX
10/2/2009 14:49 EST

My question is about anticipated taxes on my retirement income - 401K, pension, Soc Security. Since I earned my money in the US, I know I must file and pay US taxes once I start to receive it. How will I be taxed in Brazil when this money is transferred to a Brazilian Bank? Is it taxable in Brazil?

I will be retiring in a few short years. We live in the US now. I am married to a Brasileira, so I will get a Permanent Visa before moving.

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movingsoon
10/3/2009 08:27 EST

In general, you only pay taxes in one country for all money earned from all countries - even the US tax form ask if you have earned money anywhere else.
I am guessing that if you are going to retire in Brazil, you will be applying for a retirement visa, which you can get as long as you have 2000 monthly income. With that visa and CPF, you will be required to file the Brazilian tax forms to keep your status. In 'general', and I'm careful in saying that, you will be paying taxes in one country, but reporting it in both.
Its a different situation if a person is earning income in two countries. Then a person may be paying the higher tax bracket of the two countries.

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HoustonTX
10/3/2009 11:21 EST

Thanks for the response. Are you sure there is no Brazilian Taxes applied to my Soc Sec, 401K and my Pension received from my US sources?

If I understand correctly, I'll file taxes in both countries, but I only have to pay taxes in the U.S.

But, if I am filing a Brazilian Tax form, don't I need to state my "worldwide" income? Is there somewhere where I say taxes have already been applied? That "income" is the money that is received each month from my U.S. income sources. And Brazilian authorities don't want a piece of that in the form of taxes?

We'd "heard" that taxes were to be paid in both countries as Brazil has no treaty with the U.S. that avoids double taxation. That made the idea of moving to Brazil seem like a horrible idea to me! We are very confused about this, as the Tax issue could be a deal breaker!

Lastly, I am married to a Brazilian, so I'll have a Permanent Visa, not a Retiree Visa.

Again, Thank you!

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gustavoe
10/3/2009 14:38 EST

http://en.wikipedia.org/wiki/Taxation_in_the_United_States
"All U.S. citizens, including those who do not live in the United States, are subject to U.S. income tax on their worldwide income."

Aside from that, if you live more than 180 days a year in Brazil you'll also be taxed in Brazil, and also for your worldwide income.

You'll probably be able to avoid double taxation by declaring in Brazil the taxes that you payed in the US (or the other way around), but I don't know the full details of how that works.

Here you'll probably find people that know the complete answer to your needs: http://www.fellowship.com.br/

Gustavo

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HoustonTX
10/3/2009 19:38 EST

I found this:

Foreign nationals who are tax-resident in Brazil are required to pay tax on their Brazilian and overseas-generated income, unless covered by a Double Taxation Treaty between Brazil and their home country, and must file an annual tax return in April.

Foreign nationals become subject to tax-residence status if they stay in Brazil for more than 183 days in any 12-month period, and this status applies for 12 months after their last departure from Brazil.

So I do pay taxes twice! Wow!

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movingsoon
10/4/2009 14:30 EST

No, you aren't taxed twice on the same money. If you pay taxes in the US, then you claim that credit on your Brazilian form. Thus, if you pay taxes in Brazil, you claim that on your US form.
Depending on where you claim your residence, the only amount you MAY have to pay would be the difference in the tax rates betweent the two countries on the total income.

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HoustonTX
10/4/2009 17:48 EST

Thanks, I understand now. That is a relief.

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espanol3
12/30/2009 09:45 EST

I have reseached this a zillion times without the same answer twice!....All the expats in brazil whom I know tell me that they never file taxes and live off funds from atm's....My advice to you and I am sure your wife agrees is to stay out of the system there as much as possible!.....Brazil is one of the must corrupt countries and I know as I have been there more than 10 times and all over brasil except mata grosso and the amazons...Lawyers there are corrupt or incompetent or both!...Be careful of tel conversations as they can "quebrar siglio", that is, record yours without authorization from a judge unlike here!.....I here all types of general advice about income taxes there without specific details, e.g., how do they know your income as they do not get copies of 1099's nor w2P's etc....The devil as usual is in the details and that is what one must find out!.......Boa sorte!

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Taxmanrog
6/16/2017 12:47 EST

The person above is not correct. You do not simply take the US tax you pay and claim a credit on the Brazilian tax return. That works in many countries, but not all, and not Brazil. The US has tax treaties with a number of countries that allow residents of one country to take a credit for taxes paid to another. WE have no such treaty with Brazil. So if you follow the law, there is no credit for the US taxes paid on your Brazilian tax return. Brazil has treaties with many countries, such as the UK, so if it was UK tax, then you would claim the credit.

Also, Social Security is always US-sourced, so you can't take the Brazilian taxes as credits against it. Other pensions have to be analyzed to see where the person was working when the contributions were made to determine if it is US- or foreign-sourced income.

I am a CPA with over 30 years' experience with expat taxation. Let me know if you have any more questions.

Roger

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AlisaBown
11/16/2017 17:18 EST

I'm considering moving to Brazil with my Brazilian soon to be husband in a few years. Can you tell me clearly--will I have to pay taxes on my earnings to the US and Brazil?

Thanks
Alisa

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Brazil16
11/16/2017 18:08 EST

Right now there is no exchange between Brazil and the US for taxes paid. The simple is your taxes paid in Brazil may no be deducted or the taxes paid in the US may not be deducted. It maybe only a percentage not a one for one. Since the US makes you pay taxes where ever you live. I will try to keep most my money In the US. If you make money in Brazil if you stay out of the US for most of a year I think up to $80,000 Could be not taxed.by US Get a good accountant

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akabo
11/17/2017 21:41 EST

@AlisaBown,

I too am considering Brazil for a possible retirement location. Anyway, what I get from reading this thread is: you will definitely pay taxes to the US, as for Brazil, you will also pay taxes on your pension/SSI/401K/Stocks as long as you declare them. It appears that most expats keep it simple, by keeping their money in US banks, withdraw them as needed via ATM, and declare zero income in their filing in Brazil.

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OutOfHereUSA
11/17/2017 21:58 EST

NO reason for you to pay BR taxes on your retirement income living in Brasil.
Some countries like Portugal does tax your retirement income but Brasil does not.

As explained, just use your US bank ATM card to withdraw money from your US bank.
IF you can, try to open a BR bank account in a bank like Bradesco, HSBC. They are intl banks and you can usually go in and talk to a person who is just not a cashier but a personal agent. Usually in another part of the bank office. There you can use a private ATM machine and get help from your personal CSR.
AVOID ALL bank ATM machines even if they are in the lobby, try to do all your withdrawals in a private office.

You can use official legal 'CAMBIOS' too, they usually give a better rate than the banks.
They will give you a money pouch with a strap to go around your waist to hide your money inside your pants. Be aware of your surroundings when you come out.

NEVER use your card at a kiosk or outside ATM, easily gets cloned.

AND stay away from Caixa, Banco do Brasil and ALL 'national' banks. PITIFUL service will have you waiting all day in the lobby.

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Brazil16
11/17/2017 22:29 EST

I use ATM in the shopping malls. Two reason most the time they have money in the machine. I recommend two thing pull on the card slot to make sure it’s part of the machine. I use Charles Schwab debit card because you can use it at any ATM and they pay back all ATM fees. I also use credit cards that have no Internation fees. I am going to try to get residency with retirement but don’t want to transfer my money into a Brazil bank. Thinking of if possible to put as little as possible if am forced to or use my girlfriend account if possible. Any suggestions

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mcousineau
1/1/2018 15:07 EST

The United States and Brazil do not have an equalization agreement, in contrast to the U.S. and Portugal. According to information that I received from the Brazilian consulate in Washington, DC, all of your income will likely be taxed, including Social Security. However, your wife can likely advise you on the "jetinho brasileiro." Although I am retired but have not yet moved to Brazil, I learned on another expat blog that the Brazilian government does not scrutinize the income that is directed deposited to American banks and not transferred to Brazil. You will need to select a source of income that can deposit at least $2,000 to a Brazilian bank (perhaps Social Security?), and that may be taxed as high as 27.5%. However, if you retain American credit cards and pay those cards directly from an American bank, you might be able to avoid taxes on that part of your income. (Disclaimer: I am not a tax expert, and know this only from heresay.)

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mcousineau
1/1/2018 15:10 EST

The information that I received from the Brazilian Consulate in Washington DC is that retirees in Brazil have to pay taxes on ALL their income, including pensions from the United States. There is no tax equalization agreement between the U.S. and Brazil. In contrast, if you move to Portugal, you do not pay double taxes and no tax at all on Social Security.

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mcousineau
1/1/2018 15:18 EST

I am planning to retire to Brazil within the next two years and have a question for the people who say to keep all your income in a U.S. bank. In order to get a permanent visa as a retiree, don't you have to demonstrate that at least $2,000 per month will be deposited into a Brazilian bank? So don't you have to reveal that amount? I am thinking that in the case of a couple, the man could apply for a permanent visa, with his wife as a dependent, then declare his Social Security check - if it is more than $2,000 - as their income. The wife's Social Security and the rest of their retirement income could be direct deposited to a U.S. bank and used to pay their monthly charges on an American credit card. Please correct me if I am mistaken about this.

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GoingCrazyGoing
1/4/2018 19:20 EST

Some people are missing the point here on a couple of issues =
Retiring to Brasil - being married to a Brasilian -

You will NOT get a retirement visa, you will get a 'SPOUSAL' visa. You can go in as a tourist and apply to the Federal Police (usually FP office at the nearest big intl airport) once there, takes less than 3 months. PERM VISA = RNE. OR you can use your BR embassy in the US.
Don't remember a financial requirement but might be R$2000 a month (USD $600)
Think bank statements for the last 6 months would work too.

The Federal Police are hard working great people there to help you. I decided to apply in person, and was easy and painless.

ASSUMING you are NOT going to work in BR, you don't pay ANY taxes to BR, only your regular US IRS filing each year.
Your wife's situation is the same.
IF you can work under the table, just put it in your pocket and forget it.

Once you have your RNE and a CPF (social sec card) you can open a bank account in BR. Sure you can move money from your US account. Stay away from FEDERAL banks like Caixa, Banco do Brasil but go to private - HSBC is the best I think - or Bradesco, Santander.

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