IRetiremenrt Fantasy-Italy
#162
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Italy and the US both want to tax all your income, but both allow you to deduct the amount of taxes you paid to the other country. In effect, this usually means you pay the Italian tax rate, which is higher than the US rate. The exception is Social Security income, which by tax treaty is only taxed in Italy if you reside in Italy.
#165
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<I>What about retirement income like pensions, dividends, interest and capital gains?</I>
They are taxable in both countries, but because of tax treaty you can deduct the amount of tax you've already paid or deducted at source from the other country's liability. What this means in effect is you pay overall the higher of the two tax rates applicable in US or Italy. So for example if US levies 10% for a taxable income whereas Italy does 20%. So you can deduct 10% from Italy's liability, and you end up paying 10% to each country.
They are taxable in both countries, but because of tax treaty you can deduct the amount of tax you've already paid or deducted at source from the other country's liability. What this means in effect is you pay overall the higher of the two tax rates applicable in US or Italy. So for example if US levies 10% for a taxable income whereas Italy does 20%. So you can deduct 10% from Italy's liability, and you end up paying 10% to each country.
#168
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Gracious, WoinParis, your feelings for Pisa aren't very deep....
DH and I loved it. As mentioned upthread, away from the field of miracles, it is a nice city. We only stayed there 2 times and never caught colds.
annw, we loved Perugia also--so hilly though. It was a problem for my asthma.
DH and I loved it. As mentioned upthread, away from the field of miracles, it is a nice city. We only stayed there 2 times and never caught colds.
annw, we loved Perugia also--so hilly though. It was a problem for my asthma.
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Schiermonnik
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Oct 9th, 2011 06:34 AM