[AtlantaTaxExpert]

ALL CONCERNED:

Several have posted doubts about opening 401K accounts because of the taxes owed and the 10% Early Withdrawal Penalty due when they would have to close the account upon the return to mtheir home country.

I called the IRS International Tax Hotline, and the IRS representative clearly stated that anyone with an ITIN could open a rollover IRA and manage it from their home country WITHOUT breaking any laws.

Some clients have had problems getting certain IRA custodians to open rollover accounts for them, so I emailed Charles Schwab. Their answer is below:

If foreign nationals have earned U.S. income and a tax identification number, they can rollover 401(k) assets to a Rollover IRA and even make a regular contribution to the account as well. They will retain the tax deferred status when they return to their home country. If they take a distribution, it will be taxable based on the U.S. tax treaty with their home country. It would be advisable for them to consult a tax advisor such as yourself, or one in their home country, to determine their tax liability in such a situation.

Also below is the email address I used, plus the Charles Schwab website.

https://www.schwab.com/

[email protected]

I hope you find this information helpful