Hello everyone. I am on an H1b Visa and planning to move back to India soon. I will be eternally grateful if someone who has done this before can please help me out with the following. a) Can I keep my Bank account here and keep my money in USD and wire money anytime ? Is there anything additional that I need to do or can I just do it online ? Also for wiring large sums of money, is it possible to do it online ? b) What about my 401K ? Can I just leave it open or do I have to close it out ? My plan was to leave it open and just withdraw small amounts from time to time but is there anything specific that needs to be done ? c) Finally, I do have a bunch of vested RSUs in my stock account. My account is with Charles Schwab. Will I have to close it out or can I leave it open ? Can I use that account to do my normal stock trading or is that not allowed if you are in a different country ? I read somewhere that you need another TAX Id or something cause your SSN is valid only till your H1 is valid. Can anyone shed more light on that please ? Thanks a lot everyone ! Stay Safe TC:- 350K #workvisa #h1b #move
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From the info I have you can change the status of your bank account to foreign national, doing so your tax on interest will be withheld and you’ll get int-1099 every year. (Confirm with bank). If you have worked more than 40quarters(10years), You can leave your 401k and let it grow and withdraw at your retirement. If you close out early or take money out before retirement, you’ll pay tax plus 10% fees. Same thing with brokerage account as first question.
I think the 10 year time is for SSN benefits, not 401(k) .
Thanks so much @nd98bu !! Again, really grateful :) For my 401k I haven't worked for more than 10 years. Does that change anything significantly ? For my brokerage and bank account, Ill check with them about this status change, thanks !!!
a) you may keep your bank account but wiring money in and out may raise flags given the restrictions put out by RBI recently. You’ll draw attention to wire taxes in India (as well as BOFA because they charge for incoming wires as well iirc). Pulling out money is easy. Sending money to that account from India is tricky. b) I think you can do that. Can you contribute? Maybe or maybe not. You’ll get way better returns from the Indian stock market. I would pull my money out and invest in India. c) you can keep it open. Make sure you align your taxes because once you move back your tax residency will change and the dividends/capital growth on that account might attract tax in the US. Just make sure you’re paying tax in one place rather than getting taxed in both countries. SSN is unique to you and its valid for your lifetime. It’s not tied to H1 but it’s mandatory if you’re earning an income in the US, which is why you applied for it in the first place.
Wow ! Thanks so much @elastick8. I really appreciate it. For a) yes, my concern was pulling money out of BOFA into India. Considering that all my savings are in USD in my bank account here and that fact that Ill be taking a break, Ill be needing to send money from my account here to my account in india from time to time. Just so that I understand correctly, when you said "pulling out money is easy", you meant pulling out money from the US to India right ? Also, for wiring of a large sum from USA to India, I asked cause in case I decide to purchase a house in India, Ill need a significant amount of money, which will again come from my USD bank account. For b) I heard one should take it out slowly bit by bit to avoid a large tax + penalty ? For c) What do you mean by "align your taxes" ? Finally do I need another Tax ID or anything in order to be able to do all of the above ? Thanks so much for helping a brother out once again !
Vlocity, why do you think indian stock market will give more returns? Post USD INR appreciation, US stocks will always be better. And there are no hot tech stocks in India like in the us. Op, use xoom or other money transfer service to pull it out of US. There is no penalty and no additional tax on that since it's already taxed as income. Just ensure you file taxes both in us and india properly
Read RNOR and take tax benefit. You will be free of taxes on gains from stocks
This. If you keep you investment for 12 months , you dont need yo pay any tax.
I’m planning to move back to India as well and still doing my research, so take these with a grain of salt. a. Planning to leave money inbank account here and write money to India using services like Xoom as and when needed. Wiring money from India to US seems harder, and the money in US may come handy if kids want to study in US but then living in one country and having money parked in a different country is always risky. b. You can use RNOR status for first 2 years of moving back to take money out of 401k, and pay 10% penalty here. Alternately, you can let it stay and grow here, and withdraw after 59.5. The main catch is finding a broker who would not withhold 30% of your distribution when you are withdrawing money. I’m not totally clear on this but seems like a big deal from r2i forums. And if you read these forums, it seems rolling over to Roth is not attractive either. 3. It’s allowed, Schwann allows international accounts but taxes are a pain I’m told. Couple of other unrelated points, crypto is not welcome in India, so I’m planning to sell off my crypto (at a loss) when I move back. Not sure about tax Id, I assumed well retain ssn, will have to find more.
a) Yes, you can have a US bank account and can wire using Xoom, Remitly etc. make sure to change your phone number to international number. Transfer less than 9-10k in a go. b) You keep your 401k. You can’t add more to it. Try to setup EFT to bank before you leave, to be safe. c) As long as you have SSN, you can invest anywhere. Vanguard is a b$&ch in this aspect, but others don’t mind you keeping the account open. Some brokerages place restrictions on trade. They only allow trades if you have a US address on file. Make arrangements for that. Your SSN is for life. Don’t believe anyone who points otherwise.
Just completed 8yrs and planning to move back to India. Do you need to work at least 10years to get social security benefits?
It’s great to see that you are decisive about moving back. Best of luck! 90+% just follow the crowd and get stuck forever!
Op what's your NW?
This is an amazing success story. Make sure you have i140 approved with 6+ months. That will ensure you always have the path to USA open anytime you feel like coming back. Any company can use that to get you a H1b visa
Can you elaborate more on this? This is news to me...
OP, off topic, why are you making the move? Do you have a job lined up there?
I don't yet. But I really want to take a break. I am kind of burnt out and I think I've saved up enough that I can probably go a couple years without a job (I will live my parents and am hoping it'll not make a huge hole in my pocket) My current thinking is Ill try finding something after taking a break. Is that too crazy ?
It's not crazy. You have the money and you are taking a break. Have fun dude! :)