IRA and Non-residents

Amazon namaska
Feb 8 7 Comments

I'm planning to open a traditional (pre-tax) IRA account with Vanguard. I'm a non-resident who might move back to my home country in next few years.

1. What are the tips for minimizing the taxes if I do a early withdrawal on reaching my home country?
2. For early withdrawal (IRA distributions) what will be the federal tax withholding rates (apart from 10% penalty) considering there won't be any ordinary income to me in US? Keep in mind that I'll already be paying taxes in my home country for these distributions.
3. How easily I can control/operate my IRA account from overseas?

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TOP 7 Comments
  • OpenTable Meliodas
    A traditional IRA has deduction limits based on income and whether your employer offers a retirement plan.

    The federal tax would be whatever your income would be from the withdrawal. Withdraw $100K, your income is $100K.
    Feb 8 5
    • Amazon namaska
      OP
      Thanks! And how much withholding there will be?
      Feb 8
    • Wells Fargo qUyB01
      Best to ask the brokerage. I had seen a post by someone saying when he withdrew his 401K / IRA the brokerage withheld nothing, neither a tax nor a penalty
      Feb 8
    • OpenTable Meliodas
      20-30%
      Feb 8
    • Amazon namaska
      OP
      Will it consider my non-us income also for tax calculation purpose at that time?
      Feb 10
    • OpenTable Meliodas
      Maybe, you would need to ask a CPA or tax attorney.
      Feb 10
  • Amazon heyyeh
    Make sure it's Roth IRA as you can withdraw your original contribution without penalty, the penalty is only on withdrawing gains. With a traditional IRA the penalty will be on the whole amount.

    Google "backdoor Roth IRA" to see how to do this if you are over the income limit.
    Feb 10 0

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