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Pre-Retirement Tax Planning2020-03-13T12:39:22-04:00

G-4 Visa to Green Card | Pre-Retirement Tax Planning

Are you an international organization employee who is planning to retire soon? G-4 visa holders who want to retire and become permanent residents of the US will often apply for a green card.

But did you know there are certain steps you can take in the transition year before you transition from G-4 Visa to a green card holder that will save you a lot of money? When you switch from being a non-resident to US resident (i.e., go from a G-4 visa to a green card), you become taxable on your worldwide income and must report your global assets.

We work with G-4s, green card holders, and US citizens who are retiring from international organizations to help them understand their US tax and reporting requirements. We advise on the best months of the year to retire to minimize your taxes. We also advise on actions you can take, elections you can make, and pension options you can consider to significantly reduce your US taxes.

Since 1983, we’ve worked with hundreds of clients from international organizations to help them smoothly transition with pre-retirement tax planning.

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Frequently Asked Tax Questions from Those About to Retire

Once I retire, when will my US tax residency begin?2020-02-13T09:55:04-05:00

Many G-4 visa holders who apply for green cards incorrectly assume that their US tax residency will begin on the day they receive their green cards. In some cases, this is true. But in most cases, your residency will begin before that. That’s because once you retire, your days in the US start to count toward the US Substantial Presence Test of residency. And your residency start date is the earlier of the day you receive your green card or the day you were first physically present in the US during the year.

So, if you were a G-4 visa holder living in the US who retired in November and received your green card in March, your first date of residency would be January 1. This is the first day after your retirement that you were physically present in the US in the year you received your green card. This is a general rule, and there are many factors to consider. Just be careful! Some retirees have run into unintended immigration consequences by traveling outside the US to delay their residency start dates.

Should I take my pension as a lump sum or annuity?2020-02-13T09:55:32-05:00

If you are a G-4, green card holder, or US citizen retiring from an international organization, there are some great tax planning opportunities available to you. This is true whether you take a lump sum or an annuity. But you usually need to take certain actions in your year of retirement to capture those tax savings.

When deciding whether to take a lump sum or an annuity (or a combination), there are many factors to consider. First, which pension do you have? Some international organization employees participate in a gross plan. Some are in a “net” plan. Some are defined-benefit plans. Some are defined-contribution or cash-balance plans. And the tax treatment depends on whether you were a G-4, green card holder, or US citizen during your employment.

And many other factors come into play. What are your cash flow needs during retirement? Do you hope to spend your pension or pass on wealth to your heirs? What other income (separation pay, vacation payout, etc.) do you anticipate in your year of retirement?

We help employees nearing retirement understand the pension options available to them. And we work with them to identify the right solution for their situation and the actions they can take to minimize their taxes.

I’ve never had to pay US taxes before. What do I need to know?2020-02-14T15:55:47-05:00

If you are like many G-4 visa holders who retire and obtain green cards, retirement is the first time you are interacting with the US tax system. US lawful permanent residents (green card holders) are taxable in the US on their worldwide income and also must complete annual informational disclosures to report their foreign assets. To learn more, see our information for Foreign Nationals Living in the US.

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Pre-Retirement Tax & Estate Planning

We work with employees and retirees, including:

  • G-4 visa holders
  • Green card holders
  • United States citizens

Our clients work for the World Bank, ADB, IMF, IDB, IFPRI, OAS, OECD, NATO, United Nations, and other international organizations backed by foreign governments.

We can help you with:

  • Understanding how and when to take your pension payments to save large amounts of tax
  • Evaluating tax-efficiency options, such as proper use of roll-overs to different types of individual retirement accounts (IRAs)
  • Considering ways to hold your foreign assets that will reduce your US tax and annual reporting requirements
  • Understanding how US estate tax rules apply to you
  • Understanding the implications of changing your citizenship, location of primary residence, residency status of your spouse, and many other issues.

Why The Wolf Group?

Since 1983, we’ve worked with clients in the United States and abroad on international tax matters. We have a long history of “cleaning up” complex tax returns, reporting foreign assets, and reconstructing financial records.

Check out our extensive team of CPAs, all with vast international tax experience.

Looking for a Nexia International Partner?

We’re an active member of Nexia International, a global network of independent accountancy, tax and business advisors with over 250 firms around the globe.

Meet our tax professionals

Mishkin Santa

Mishkin Santa

Principal, Director of International Tax
Siobhan Enoch

Siobhan Enoch

Senior Tax Specialist
Michelle Rizzo

Michelle Rizzo

Senior Manager-International Corporate Tax
All Team Members

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What our clients say

“I am very satisfied with the service at The Wolf Group. It’s very comforting to have the trust in professionals who are familiar with the G4 situation, as I have previously received conflicting and confusing guidance from most, if not all my previous tax advisors.”

“This was the first time I had to file taxes in the US. There was some complexity to it because my wife’s pension is paid and taxed in another country. I was grateful for the expert help that I received from The Wolf Group.”

“I am so glad to have found out about The Wolf Group through seminars at BFSCU—my situation as a G4 married to a US citizen is complicated but I know that I do not have to worry, as I am in good hands with extremely knowledgeable assistance. Thank you! I will be back again next year!”

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