I have a 401K that is vested. I plan to go to India and cash it. How to do without paying much penalty and tax

Posted by admin
401k
Bala Gopalakrishnan asked:

I have a 401K that is vested for around 100000 US$ and I am allowed to take it after I leave the employer. I do plan to go back to India. Is it possible to take 15,000 $ per year and avoid paying federal and state taxes ( Since Iam out of country and not a resident + it falls with less income per annum). Is there a penalty that I have to pay while taking money out. I will have closed all my bank accounts except this IRA/401K account and so how would I pay the penalty and any taxes that might occur. Please advice.


Question posted courtesy of: Sylvia
Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • Bumpzee
  • del.icio.us
  • Facebook
  • Furl
  • Mixx
  • NewsVine
  • Reddit
  • StumbleUpon
  • YahooMyWeb
  • Google

  • Investing in India from the US…?
  • Mutual Fund ::: PAN ::: DP Account ::: India ::: ????
  • Can I withdraw from my 401k without penalty to fund my college tuition?
  • 401k cash out question - help?
  • Can I use my IRA retirement account money for surgery?
  • Should i cash in my 11000 retirement to pay off all my bills?
  • stock market questions from a beginner?

    • This entry was posted on Monday, July 7th, 2008 at 11:45 pm and is filed under Financial Planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

    « Should I quit contributing to 401k and put the extra money I’ll get paid to pay off debt?
    What’s a good 401K allocation mix for these current times for a 45 year old person? »

    3 Responses to “I have a 401K that is vested. I plan to go to India and cash it. How to do without paying much penalty and tax”

    1. OutofUSA Says:
      July 10th, 2008 at 2:38 pm

      For non resident you can offset against this income tax return 1040 or applicable in your usa income tax return.

    2. Judy Says:
      July 11th, 2008 at 5:10 am

      For the year so taking it out over time would depend on anything you withdraw before youre age 5912.
      The year so taking it out over time would make sense.

    3. digdowndeepnseattle Says:
      July 13th, 2008 at 5:10 pm

      The others hit it right on the 59 1/2 age thing but also since you will be out of the country the mandatory withholding goes up to 30%. Yes, by minimizing the distribution amount you can lower your tax but you’ll still need to file US returns to get that extra money back. If you don’t live in the states you won’t have any state tax.

    Leave a Reply