401K and taxes for Green Card holder permanently leaving the country.

Discussion in 'Off Topic' started by alkemyst, Nov 8, 2012.

  1. alkemyst

    alkemyst No Lifer

    Joined:
    Feb 13, 2001
    Messages:
    83,985
    Likes Received:
    8
    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.
     
  2. paulney

    paulney Diamond Member

    Joined:
    Sep 24, 2003
    Messages:
    6,916
    Likes Received:
    1
    This space for rent.
     
  3. sdifox

    sdifox No Lifer

    Joined:
    Sep 30, 2005
    Messages:
    68,008
    Likes Received:
    2,626
    why would you be liable for tax burden if you are divorced?
     
  4. Newbian

    Newbian Lifer

    Joined:
    Aug 24, 2008
    Messages:
    24,156
    Likes Received:
    278
    Got to love the free market at work. :p
     
  5. alkemyst

    alkemyst No Lifer

    Joined:
    Feb 13, 2001
    Messages:
    83,985
    Likes Received:
    8
    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.
     
  6. EagleKeeper

    EagleKeeper Discussion Club Moderator<br>Elite Member
    Staff Member

    Joined:
    Oct 30, 2000
    Messages:
    42,600
    Likes Received:
    1
    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.
     
  7. alkemyst

    alkemyst No Lifer

    Joined:
    Feb 13, 2001
    Messages:
    83,985
    Likes Received:
    8
    She will be quitting. She'd like to work until she leaves in Feb or so though.
     
  8. dud

    dud Diamond Member

    Joined:
    Feb 18, 2001
    Messages:
    7,374
    Likes Received:
    26
    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 ...
     
  9. waggy

    waggy No Lifer

    Joined:
    Dec 14, 2000
    Messages:
    68,159
    Likes Received:
    7
    yeap.
     
  10. zanejohnson

    zanejohnson Diamond Member

    Joined:
    Nov 29, 2002
    Messages:
    7,034
    Likes Received:
    1
    republican meltdown?
     
  11. alkemyst

    alkemyst No Lifer

    Joined:
    Feb 13, 2001
    Messages:
    83,985
    Likes Received:
    8
    lol, at the fucking retard and hillbilly that think I am just lying here.

    Your time is coming soon. :)
     
  12. Newbian

    Newbian Lifer

    Joined:
    Aug 24, 2008
    Messages:
    24,156
    Likes Received:
    278
    It's alky we are talking about.
     
  13. waggy

    waggy No Lifer

    Joined:
    Dec 14, 2000
    Messages:
    68,159
    Likes Received:
    7
    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
     
  14. TecHNooB

    TecHNooB Diamond Member

    Joined:
    Sep 10, 2005
    Messages:
    7,454
    Likes Received:
    0
    you're going to upset the kids
     
  15. Greenman

    Greenman Lifer

    Joined:
    Oct 15, 1999
    Messages:
    10,724
    Likes Received:
    33
    He voted "Bro" in the last election.
     
  16. paulney

    paulney Diamond Member

    Joined:
    Sep 24, 2003
    Messages:
    6,916
    Likes Received:
    1
    The question is... what will happen to the M3?
     
  17. Turin39789

    Turin39789 Lifer

    Joined:
    Nov 21, 2000
    Messages:
    12,221
    Likes Received:
    4
    This sounds like the answer.

    Also, how bad can half of the tax burden on $6,500 be?
     
  18. Doppel

    Doppel Lifer

    Joined:
    Feb 5, 2011
    Messages:
    13,313
    Likes Received:
    1
    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.