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Chris W. Rea
Chris W. Rea
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Foreign national currently working in U.S. & investing in 401K401(k) plan: How will taxes apply?

I am a foreign national currently working in USA. I am considering contributing around 5K to a 401K plan (with no employer match). I intend to return to my country in a few years (when I am in my 40s).

  1. Is the 401k401K contribution both Federal and State tax exempt at the time of contribution? I live in California.
  2. When I take the money out of the 401K before I turn 40 (not 60!) , I expect I'll be based in another state  (income-tax-free) or possibly another country. Will I be liable for state taxes at that time in addition to the Federal tax plus 10% penalty?

Note: Please don't flame me for being a foreign national who wants to take his  (own) 401K. I pay Social Security like everyone else, even though I know I'll never get anything back from it.

Foreign national investing in 401K

I am a foreign national currently working in USA. I am considering contributing around 5K to a 401K plan (with no employer match). I intend to return to my country in a few years (when I am in my 40s).

  1. Is the 401k contribution both Federal and State tax exempt at the time of contribution? I live in California.
  2. When I take the money out of the 401K before I turn 40 (not 60!) , I expect I'll be based in another state(income-tax-free) or possibly country. Will I be liable for state taxes at that time in addition to the Federal tax plus 10% penalty?

Note: Please don't flame me for being a foreign national who wants to take his(own) 401K. I pay Social Security like everyone else, even though I know I'll never get anything back from it.

Foreign national currently working in U.S. & investing in 401(k) plan: How will taxes apply?

I am a foreign national currently working in USA. I am considering contributing around 5K to a 401K plan (with no employer match). I intend to return to my country in a few years (when I am in my 40s).

  1. Is the 401K contribution both Federal and State tax exempt at the time of contribution? I live in California.
  2. When I take the money out of the 401K before I turn 40 (not 60!) , I expect I'll be based in another state  (income-tax-free) or possibly another country. Will I be liable for state taxes at that time in addition to the Federal tax plus 10% penalty?

Note: Please don't flame me for being a foreign national who wants to take his  (own) 401K. I pay Social Security like everyone else, even though I know I'll never get anything back from it.

clarification
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Tim
Tim
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I am a foreign national currently working in USA. I am considering contributing around 5K to a 401K plan (with no employer match). I intend to return to my country in a few years (when I am in my 40s).

  1. Is the 401k contribution both Federal and State tax exempt at the time of contribution? I live in California.
  2. When I take the money out of the 401K before I turn 40 (not 60!) , I expect I'll be based in another state(income-tax-free) or possibly country. Will I be liable for state taxes at that time in addition to the Federal tax plus 10% penalty?

Note: Please don't flame me for being a foreign national who wants to take his(own) 401K. I pay Social Security like everyone else, even though I know I'll never get anything back from it.

I am a foreign national currently working in USA. I am considering contributing around 5K to a 401K plan (with no employer match). I intend to return to my country in a few years (when I am in my 40s).

  1. Is the 401k contribution both Federal and State tax exempt at the time of contribution? I live in California.
  2. When I take the money out of the 401K before I turn 40 (not 60!) , I expect I'll be based in another state or possibly country. Will I be liable for state taxes at that time in addition to the Federal tax plus 10% penalty?

Note: Please don't flame me for being a foreign national who wants to take his(own) 401K. I pay Social Security like everyone else, even though I know I'll never get anything back from it.

I am a foreign national currently working in USA. I am considering contributing around 5K to a 401K plan (with no employer match). I intend to return to my country in a few years (when I am in my 40s).

  1. Is the 401k contribution both Federal and State tax exempt at the time of contribution? I live in California.
  2. When I take the money out of the 401K before I turn 40 (not 60!) , I expect I'll be based in another state(income-tax-free) or possibly country. Will I be liable for state taxes at that time in addition to the Federal tax plus 10% penalty?

Note: Please don't flame me for being a foreign national who wants to take his(own) 401K. I pay Social Security like everyone else, even though I know I'll never get anything back from it.

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Tim
Tim
  • 113
  • 2
  • 6

Foreign national investing in 401K

I am a foreign national currently working in USA. I am considering contributing around 5K to a 401K plan (with no employer match). I intend to return to my country in a few years (when I am in my 40s).

  1. Is the 401k contribution both Federal and State tax exempt at the time of contribution? I live in California.
  2. When I take the money out of the 401K before I turn 40 (not 60!) , I expect I'll be based in another state or possibly country. Will I be liable for state taxes at that time in addition to the Federal tax plus 10% penalty?

Note: Please don't flame me for being a foreign national who wants to take his(own) 401K. I pay Social Security like everyone else, even though I know I'll never get anything back from it.