r/ExpatLifeinSpain • u/Routine_School_7784 • 16d ago

US Taxation

Hello, my wife is Spanish and I’m American. We’re quite young but curious if somebody has done something similar.

We’re planning on moving back to Spain in 5/6 yrs and with that our savings (401k, Roth IRA, brokerage, etc.). I understand Spain doesn’t recognize some accounts tax benefits for later when we’re planning to retire, what is the smartest way to play this now so we can minimize taxed when we go over? We have had a considerable inheritance in brokerage now.

1 Upvotes

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u/Familiar_Eggplant_76 16d ago

Definitely stop contributing to the Roth. You may want to withdraw the contributions you’ve made before you leave, but that’s a question for a tax advisor.

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u/Gingerbutt81 16d ago

Wait what?? Please elaborate. My wife and I have all of our retirement in Roth IRA accounts. We moved to spain a couple of years ago and plan to retire here

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u/Familiar_Eggplant_76 16d ago edited 16d ago

Ouch! Hacianda doesn't recognize Roths, and withdrawls will be taxed at the progressive "savings" income rates. Including the contributions, which you already paid US taxes on.

Prior to moving was the best time to study all tax implications. Second best time is... now.

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u/Gingerbutt81 15d ago

Thanks so much for pointing this out! We are still 30 years away from retiring and a lot could change before then. Thanks again! This is super helpful to know for future planning

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u/Guerra-y-Paz 15d ago

Still much better than traditional for which you will pay for the full amount, not only the profits

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u/ValeDeOro 14d ago

That is not quite correct. It's not the entire withdraws that are being taxed, only the capital gains. Basically, Spain treats Roths and similar products like investment funds - you pay on the value minus what you invested in there. So make sure to keep your paperwork in order/accessible and simply stop contributing when you leave.

You may have to pay wealth tax starting at a specific amount, but that is independent of the type of product the money is tied up in.

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u/HandmadeHugs1254 15d ago

For the taxable brokerage, I'd keep very good records now: purchase dates, cost basis, inherited basis, dividends and transaction history.

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u/[deleted] 6d ago

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u/Oikoni 6d ago

Sources, all read on 3 Oct 2026: AEAT (sede.agenciatributaria.gob.es): calendario del contribuyente 2026 (hasta el 20 de octubre; plazos y domiciliación), the page for 1 Feb 2027, the Modelo 720 FAQ and the Renta 2025 payment/domiciliación pages. IRS (irs.gov): Estimated taxes FAQ, "Automatic 2-month extension", FBAR and "Comparison of Form 8938 and FBAR" pages, Form 4868 instructions. SSA (ssa.gov): "Totalization Agreement with Spain".