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Old 11-08-2012, 08:14 PM   #1
alkemyst
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Default 401K and taxes for Green Card holder permanently leaving the country.

My wife and I are divorcing. She has a 401K. What is the tax situation on if she leaves the country permanently and wants to take it out?

This would happen after 12/31/12.

I don't want to be stuck with a tax burden on it for 2013.
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Old 11-08-2012, 08:16 PM   #2
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This space for rent.
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Old 11-08-2012, 08:16 PM   #3
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why would you be liable for tax burden if you are divorced?
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Old 11-08-2012, 08:23 PM   #4
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This space for rent.
Got to love the free market at work.
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Old 11-08-2012, 08:25 PM   #5
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why would you be liable for tax burden if you are divorced?
I don't know, but I don't want to be somehow whether by lien on our home (she was on the deed, not the note) or her car I am going to sell.

She's going to have to take the tax affidavit to be allowed to permanently leave (many just skip this step and move out), but she doesn't know if she will ever end up back in the USA. I doubt she will, but she worries about EVERYTHING.

If everything works out well, I am going to let her just keep that 401k intact (it's only $6500 right now) and just pay from the proceeds from our liquidations.
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Old 11-08-2012, 08:39 PM   #6
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401K is through her employer. Is she quitting? Best thing to do is set het up an IRA in her name only.

Roll over the 401K into the IRA. Now it is her headache alone if she chooses to liquidate. If you file a joint return for 2012 the 401K shows up and is offset by the IRA rollover. Make sure that conversion is done before end of year. Then the following year, ensure no ties into her financially. Her income is hers. The divorce needs to be finalized before the IRA gets liquidated. Otherwise you can be liable.
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Old 11-08-2012, 08:45 PM   #7
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She will be quitting. She'd like to work until she leaves in Feb or so though.
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Old 11-08-2012, 08:47 PM   #8
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Here we go again ...

Can we assume that you (no pun intended) are filing married filing jointly?

If the answer is yes AND she withdraws funds before you divorce my GUESS is that yes, you (jointly) will be responsible for a bunch-o-taxes ... unless you can convince her to wait until after the legal divorce.

I can't wait to see where this thread goes ...
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Old 11-08-2012, 08:48 PM   #9
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Here we go again ...

Can we assume that you (no pun intended) are filing married filing jointly?

If the answer is yes AND she withdraws funds before you divorce my GUESS is that yes, you (jointly) will be responsible for a bunch-o-taxes ... unless you can convince her to wait until after the legal divorce.

I can't wait to see where this thread goes ...
yeap.
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Old 11-08-2012, 08:51 PM   #10
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republican meltdown?
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Old 11-08-2012, 09:00 PM   #11
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lol, at the fucking retard and hillbilly that think I am just lying here.

Your time is coming soon.
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Old 11-08-2012, 09:00 PM   #12
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republican meltdown?
It's alky we are talking about.
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Old 11-08-2012, 09:02 PM   #13
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lol, at the fucking retard and hillbilly that think I am just lying here.

Your time is coming soon.
who thinks you are lying? considering how much you cheat on her its no shock. most likely the best for both of you.


as for for the tax's you guys are married. you will end up shareing the tax burden. shrug
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Old 11-08-2012, 09:08 PM   #14
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you're going to upset the kids
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smoblikat you fool, you fell victim to one of the classic blunders! the most famous of which is "never post your actual pay in an ATOT brag thread", but only slightly less well known is this: "never post your actual pay when alkemyst is online!!" hahahahaha
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Old 11-08-2012, 09:09 PM   #15
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It's alky we are talking about.
He voted "Bro" in the last election.
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Old 11-08-2012, 09:12 PM   #16
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The question is... what will happen to the M3?
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Old 11-13-2012, 09:08 PM   #17
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401K is through her employer. Is she quitting? Best thing to do is set het up an IRA in her name only.

Roll over the 401K into the IRA. Now it is her headache alone if she chooses to liquidate. If you file a joint return for 2012 the 401K shows up and is offset by the IRA rollover. Make sure that conversion is done before end of year. Then the following year, ensure no ties into her financially. Her income is hers. The divorce needs to be finalized before the IRA gets liquidated. Otherwise you can be liable.
This sounds like the answer.

Also, how bad can half of the tax burden on $6,500 be?
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Old 11-13-2012, 09:37 PM   #18
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This sounds like the answer.

Also, how bad can half of the tax burden on $6,500 be?
It can't be bad.

Is it unreasonable to just have her clear it out now, pay the 10% penalty on that, and then consider the remaining $5850 as income for this year? I assume she wants the money. I have no tax experience, just throwing it out there.
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