[WWRAX]

Hi,

I'm right now on a work visa in U.S. and I'm not sure when I'll have to leave.

- If I open a traditional IRA account, I'll get tax benefits. Say, I'll put 2000 this year. This 2000 will be deducted.
- If I don't put this money away into IRA, this 2000 will be taxed(federal state tax).

My question is, if I have to leave U.S. One day, I'll be no longer a resident, and then I don't have income here. If I withdraw then(early withdrawal), I should be subject to the early penalty tax.
However, I will no longer be a resident and does not have income by then. Will I have to pay tax for the money I withdraw?

Thanks!

[taxesforaliens]

First, once you leave you should provide form W8BEN.
When you take a distribution, income taxes will be withheld. The withholding rate is 30% unless your country has a tax treaty and the rate is lower (some treaties specify 10%). You specify the country on the W8BEN.
You then file a non-resident return for that year. You will get a personal exemption which is for 2011 $3700. So you could take a distribution of $3700 and get all withheld taxes back (except for the penalty).
If you are now in the 25% tax bracket, you would still safe 15% in taxes this way. However, you would have to check how this kind of income is taxed in your home country.

[WWRAX]

Thank you very much!

I saw that China has a treaty with the U.S. http://www.irs.gov/pub/irs-trty/china.pdf.