I am a Turkish citizen working in the USA with H1. I am permanently leaving the country in 20 days. I also have a 401k account. I am told that if I withdraw money now, I will have to pay %20 tax +%10 penalty. If I leave the money in that account, and withdraw it a few years later from Turkey with the form w8-ben, can I avoid paying tax + penalty?

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Originally Posted by ufuksoyoz

i am a Turkish citizen working in the USA with H1. I am permanently leaving the country in 20 days. I also have a 401k account. I am told that if i withdraw money now, I will have to pay %20 tax +%10 penalty. If I leave the money in that account, and withdraw it a few years later from Turkey with the form w8-ben, can I avoid paying tax + penalty?

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No... because taxes will be due in any case... (they were dax deffered.. not tax exempt) and the only way to avoid penalties is to roll them into an IRS accepted plan something I highly doubt exists outside the USA... or start withdrawing them after you are old enough.

Charles Schw will let you roll the 401 k into a rollover IRA. TYiu then wait until age 60 to start drawing on it to avoid the 10% Early Withdrawal Penalty.

Simple!