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raghav_s_81 · Jul 17, 2009, 11:33 AM

I am Indian citizen and I have been working in the USA (H1-B) for the last 3 years. I am planning to move to India for good in the beginning of 2010. I have some questions in this regard.

1. I have around 25000$ USD in savings. What is the best way to take this money to India when I move back? How do I ensure that this amount is not taxed by the Indian govt (as I have already paid tax for this in USA) ? I have an NRE account in India. Will transferring all my savings to the NRE A/C be a good option.

2. I have around 20000$ USD in 401k retirement. I am planning to do an early withdrawal of this. What are the tax liabilities of doing so?

3. How do I file my US-taxes for 2009 from India? I have been doing it online through Turbo-Tax so far. Will that still work.

Anything else that I need to take care of ? Any inputs on this will be greatly appreciated.

AtlantaTaxExpert · Jul 20, 2009, 07:48 AM

1) I cannot answer this question, as it deal with INDIAN tax law, and this forum addresses U.S. tax law. You may want to post this question on mytaxes - Index

2) You will pay a 10% Early Withdrawal Penalty in addition to normal federal and state income taxes. I recommend that you transfer the money to a Charles Schwab rollover IRA, then manage the fund from India via phone, Internet and email. That way, the taxes are avoided until after you retire.

3) You probably can file your resident alien return (Form 1040) from India on-line, but I would query TurboTax to be sure they allow the filing of such taxes from a location outside of the U.S.