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    mkvvs's Avatar
    mkvvs Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Mar 12, 2007, 11:54 AM
    Tax deductions while leaving US
    Hi

    I have stayed in US for 3 years with L1-A visa and I am planning my return to India. My question is can I recover my Social security and Medicare tax which was deducted for last 3 years? Also past year I had invested in Traditional IRA some amount, I am told that I can withdraw that after April 2007 and that amoutn will be taxed in 2007 ?

    Appreciate some help in this matter.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Mar 14, 2007, 08:42 PM
    No, you cannot recover the Social Security and Medicare taxes.

    It will be taxed, but WHY withdraw it? Keep it in the account and manage it from India using phone and email.
    mkvvs's Avatar
    mkvvs Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Mar 17, 2007, 02:37 PM
    So do you mean that I can claim back the Social security tax but it will be taxed. OR do you mean it cannot be claimed back even if you are leaving the country.
    amdes's Avatar
    amdes Posts: 1, Reputation: 1
    New Member
    		  
    #4

    Mar 20, 2007, 07:41 AM
    Hi, I think the answer above means that :-
    1. you cannot recover / claim Social Security and Medicare taxes.
    2. the "it will be taxed" part was the answer to your second question about IRA. - I think that meant that IRA withdrawal will be taxed in the year you withdraw and I believe there will be a 10 % early withdrawal penalty also included in the taxation.

    TaxExpert, correct me if I am wrong. I researched this and could not find a way to avoid the 10% penalty if you want to withdraw and you are leaving the country.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #5

    Mar 22, 2007, 09:25 AM
    Amdes:

    You are correct; if you withdraw the IRA and leave the country, you MUST pay the 10% Early Withdrawal Penalty in addition to normal federal and state income taxes.
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