Are we eligible to continue paying into our Roth IRAs?

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Hi,

I'm not a US tax person, but my sister is, this was her response to the Roth IRA question:

"IRAs are only available to you as investments if you have earned income in the US.  You have earned income in the UK that gets reported on your US return, but it then gets excluded because you pay tax on it in the UK.  This rule keeps you from having to pay UK and US tax on the same income.  However, it also means that you aren't eligible for IRAs at all b/c you don't have any US earned income."

{Disclaimer section} My circumstances probably aren't exactly the same as yours, so for a specific answer for your situation you should contact a professional.  

You do not say if you are claiming the foreign earned income exclusion or how long the green card has existed.

Is your husband domiciled within the UK?  If so his investment portfolio does not appear to give the best UK result?  Do you pay UK tax on the arising or the remittance basis?

How long will you be in the UK?

You clearly both need to be filing UK tax returns for 2009/10 identifying whether or not you are domiciled in England & Wales (unlikely from what you have said) and - if not U domiciled decide each year whether or not to elect the remittance basis.

You will also wish to decide annually whether to claim the benefits under the UK/US tax treaty to avoid annual UK tax on income within your IRAs.

You will need to notify HMRC by 5 October 2010 that you both need to be in self-assessment.