401K
Jul 9th 2013, 5:21 pm
#16
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: 401K
Errrm do I understand it right. At 59.5 I can cash in the fund and theres no tax liability? I guess an 'early withdrawal' in your post means just after 59.5 and before retirement age.
I can wait till then if I know I can just cash it all out and be OK. I dont want to have to do a US tax return yearly if I can help it, too complex for what is just a pension withdrawal.
Thanks
Jon
I can wait till then if I know I can just cash it all out and be OK. I dont want to have to do a US tax return yearly if I can help it, too complex for what is just a pension withdrawal.
Thanks
Jon
If you are not a US citizen and are not US resident (ie you are a non-resident alien) there will be no US tax due on withdrawals from your 401k. Just file a W8-BEN with your 401k administrator and you will receive 401k income with no tax withheld and there will be no need to file a 1040. I don't know about Belgian tax, but I imagine that there is an Article in the US/Belgian tax treaty that covers 401ks and the you will be liable to Belgian income tax on the withdrawals.
Last edited by nun; Jul 9th 2013 at 5:27 pm.
Jul 10th 2013, 5:59 am
#17
BE Positive
Thread Starter
Joined: Sep 2005
Posts: 3,980
Re: 401K
If you don't need the money in the 401k and you are happy with where it's invested just leave it where it is until you are 59.5; withdrawal of the money before that will result in a 10% penalty. There is no need to buy a US annuity unless you want the guaranteed income. You can leave the money invested just as you wish. Unlike the UK there is no US law forcing you to buy an annuity with retirement monmey after you reache a certain age.
If you are not a US citizen and are not US resident (ie you are a non-resident alien) there will be no US tax due on withdrawals from your 401k. Just file a W8-BEN with your 401k administrator and you will receive 401k income with no tax withheld and there will be no need to file a 1040. I don't know about Belgian tax, but I imagine that there is an Article in the US/Belgian tax treaty that covers 401ks and the you will be liable to Belgian income tax on the withdrawals.
If you are not a US citizen and are not US resident (ie you are a non-resident alien) there will be no US tax due on withdrawals from your 401k. Just file a W8-BEN with your 401k administrator and you will receive 401k income with no tax withheld and there will be no need to file a 1040. I don't know about Belgian tax, but I imagine that there is an Article in the US/Belgian tax treaty that covers 401ks and the you will be liable to Belgian income tax on the withdrawals.
I was interested in what happens with the 401K at maturity and my tax liability, living abroad.. not early withdrawals, fund selection and costs etc. Also if I could close it or move it to another pre-registered pension plan. But I appreciate the ideas. I know from experience that filling out tax declarations in the US is a real hassle, the 1040EZ, is not so 'EZ'... I wanted to avoid this to save the hassle of filling it out. Its not a huge fund so even more of a drag.
Its obviously very complicated, but if the post above is correct (THANK YOU Nun).. and my W8 will work as above then its no problem, I can explain all to my accountant who will in the future put it into the local return.
I hope so!.. But I have a 'niggling feeling....'
Thanks
Jon
