[jennietoh]

I am holding L1 Visa and have been working in New Jersey for 2 and 1/2 years and I will be leaving New Jersey when my contract with my company ends on 31st of March 2011. However, I will be leaving USA for good in February 2011. I have been filing taxes yearly.

1) What is the implication on taxes for Jan to March 2011? How do I file the taxes for 2011 when I am already back to my country.
2) Can I get my 401k back with I leave the country for good?
3) Can I still keep my bank account open and if not, when do need to close the account.

[AtlantaTaxExpert]

1) You have a choice.

- You can file as a resident and include the income earned in your home country on the U.S. return, then claim the Foreign Tax Credit using Form 1116.

OR

- You can file a dual-status return.

In either case, you need to submit a Residency Termination Statement.

2) You CAN ask for an early distribution of your 401K plan, but doing so makes the distribution subject to federal AND state income taxes, PLUS you will pay at least a 10% Early Withdrawal Penalty. I have also heard that, for 2011, the Early Withdrawal Penalty increases to 20%, but I have not had time to verify that with the IRS.

3) Definitely keep your U.S. bank account open, because you will want to direct deposit any tax refunds to that account. Both quicker AND safer than getting a check in the mail.