UK Income

[MGOAdmin]

Can a US citizen working in the UK as a sole trade (their version on sole proprietor) set up a 401k or SEP based on his UK income?

Per the US/UK totalization agreement, the income is not subject to Social Security, but is reported on Sch.C  of his 1040.

I know we only use wages that are subject to social security but this is an odd situation.

[Luke Bailey]

MGOAdmin, since no one else has suggested an answer for you, I will tell you that I don't know for sure, but suspect you can. The plan would need to be set up with U.S. trustee. Note that whether UK will give you a deduction from your UK tax liability, and how the U.S. deduction would interact with foreign earned income exclusion, foreign tax credit, etc., needs to be thought through.