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My Work Visa expires in April 2007. So i may have to go back to my country. Is there any way i can save on this 401 K money. I can keep it as it is in 2007 and take it out in 2008. In 2008, i won't have any income in the United States and so whether i will save on taxes for 401K?

2006-12-29 04:14:20 · 4 answers · asked by smart_plus_polite 1 in Business & Finance Taxes Other - Taxes

4 answers

If you are going to leave the country and never come back then withdraw it in 2007 because it won't be reported until the end of the year. If you have a base in it then you can deduct your base off the total and the penalty will be less. If you plan on working until April 2007 then you would want to file a return in 2008 just to get any refund back even though you are out of the country, but if you aren't worried about a refund then take your 401K and run. Of course if you ever came back to the US and tried to work they might get you for income tax evasion.

2006-12-29 10:26:22 · answer #1 · answered by Red Velvet 2 · 2 0

The distribution from the 401(ok) is taxed as elementary earnings. on account which you're under age fifty 9 a million/2, there is one extra 10% penalty on appropriate of that. while you're earning $36k this 12 months and are unmarried, the 20% withholding from the distribution will in all probability no longer be adequate to conceal the full tax and penalty on the distribution. you will maximum in all probability be in a 15% tax bracket so the tax on the distro would be $319.sixty 5 plus the ten% penalty of $213.10 for a entire due of $532.seventy 5. The $426.20 withheld from the distro is obviously no longer adequate to conceal the full due. while you're like maximum taxpayers you have way too plenty withheld out of your generally happening wages besides so it is going to in all probability no longer bring about a tax invoice once you record; your refund will basically be $106.fifty 5 smaller than it in any different case may be. once you're truly in a pinch it might make extra experience to withdraw in basic terms adequate to tide you over on your first paycheck and do a rollover to an IRA on the steadiness. which will cut back the tax and penalty and shelter as quite some the tax deferred prestige as possible. Even extra beneficial, roll it over to a Roth IRA. you will pay tax on the full quantity, plus 10% on the quantity which you do no longer roll over, however the payout once you retire would be completely tax unfastened. you're youthful adequate now that the steadiness on that would desire to be hundreds at retirement time even if in case you by no potential make a contribution a dime to it for something of your working lifetime.

2016-12-31 03:34:51 · answer #2 · answered by ? 4 · 0 0

You should file your taxes for 2007 after your Visa expires - mostly because if you dont you wont be granted a visa to ever come back.

But it would be best to check with your plans administrator - they will be able to get you the answers to your question.

2006-12-29 04:23:19 · answer #3 · answered by Tiffany 3 · 0 0

Nope. If your employer allows it you may be able to keep the account as is. Otherwise you'll have to roll it over into another qualifying retirement account (IRA, etc.) to avoid taxes and penalties. If you take the funds any other way prior to retirement age you must pay the taxes and the 10% penalty tax.

2006-12-29 04:19:04 · answer #4 · answered by Bostonian In MO 7 · 1 2

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