View Full Version : Leaving US in March this year
lalji
Mar 10, 2016, 06:19 PM
Atlanta tax expert,
I plan on permanently leaving US this month. Would appreciate if you could respond to my questions below. Thanks.
1)Can I file form 1040 in 2016 and in 2017?
2)I am from India. If I need to file 1040-NR next year am I eligible to claim standard deduction and exemption for dependents?
AtlantaTaxExpert
Mar 10, 2016, 06:42 PM
1) Yes for 2016, because your default Residency Termination date is 31 December 2016. You will have to declare ALL world-wide income and claim the Foreign Tax credit (Form 1116) for taxes paid to India.
No for 2017, unless you are a green card holder or U.S. citizen, because you will have become a non-resident alien.
2) No on the standard deduction and claiming dependent exemptions. That applies only if you are on a J-1 or F-1 visa while present INSIDE the U.S.
lalji
Mar 10, 2016, 07:19 PM
So, is it correct that in 2017 I get no standard deduction and only one exemption?
AtlantaTaxExpert
Mar 10, 2016, 08:11 PM
Yes, but if you are in India for all of 2017, WHY would you file?
lalji
Mar 13, 2016, 05:52 PM
I am considering if I should do a 401K withdrawal either this year or next year?
AtlantaTaxExpert
Mar 13, 2016, 05:58 PM
You should wait until you return to India if you do the withdrawal. That way, no STATE income taxes will be due.
Better yet, roll the money over into a IRA and manage it from India using the Internet.
lalji
Mar 13, 2016, 06:25 PM
Are there any state taxes if I make a 401K withdrawal? I currently live in Illinois?
AtlantaTaxExpert
Mar 13, 2016, 07:27 PM
Yes. If you make the withdrawal while living in Illinois, the state of Illinois considers it Illinois-based income and will tax it accordingly.