I am a post-doc on J-1 visa status and have been in the US for the past 5 years paying taxes as a resident alien. I am thinking of leaving the US permanantly and going back to my home country in the next couple of years. I had questions about the tax consequences of my 401(k) / 457(b) / taxable investment accounts.

1) I know that I can keep my 401(k) active ( without any further contributions ) even after I leave the US and take distributions after the age of 59 ½. But what will be the tax consequences of this ? Will I be treated differently since I am no longer a resident alien ? Will I be eligible for the standardized deduction ?

2) I can save some tax instantly by putting money into a deferred compensation 457(b) plan. Also, the IRS 10% penalty on withdrawals made prior to age 59 ½ does not apply to the 457(b), thus I can withdraw this money penalty free anytime after I leave this employment. What will be the tax consequences if I decide to take annual distributions from my 457(b) after I am in my home country ? Will I still be eligible for the standard deduction ( Currently $8500 / year ) on taxes ? If that is the case, does that mean I can withdraw any amount below $8500 annually without paying any taxes ?

3) If I decide to keep pre-taxed money invested in mutual funds even after I leave the US, how will I be taxed on the capital gains / dividends that I receive periodically ? Will I have to keep filing my taxes every year ? Is there a particular amount below which I do not need to file taxes ?

Thanks.

1) Money will be withheld from the distribution to ensure you file a tax return. Other than that, you will need to file as a non-resident alien.

2) You will NOT able able to claim the standard deduction as a non-resident alien, but you will be able to claim the personal exemption (crrently $3,300).

3) You will NOT be taxed on the capital gains/dividends as long as they are reinvested. No annual tax return should be required as long as you take no distributions.