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    lalji's Avatar
    lalji Posts: 81, Reputation: 2
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    #1

    Mar 10, 2016, 06:19 PM
    Leaving US in March this year
    Atlanta tax expert,

    I plan on permanently leaving US this month. Would appreciate if you could respond to my questions below. Thanks.

    1)Can I file form 1040 in 2016 and in 2017?
    2)I am from India. If I need to file 1040-NR next year am I eligible to claim standard deduction and exemption for dependents?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Mar 10, 2016, 06:42 PM
    1) Yes for 2016, because your default Residency Termination date is 31 December 2016. You will have to declare ALL world-wide income and claim the Foreign Tax credit (Form 1116) for taxes paid to India.

    No for 2017, unless you are a green card holder or U.S. citizen, because you will have become a non-resident alien.

    2) No on the standard deduction and claiming dependent exemptions. That applies only if you are on a J-1 or F-1 visa while present INSIDE the U.S.
    lalji's Avatar
    lalji Posts: 81, Reputation: 2
    Junior Member
    		  
    #3

    Mar 10, 2016, 07:19 PM
    So, is it correct that in 2017 I get no standard deduction and only one exemption?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Mar 10, 2016, 08:11 PM
    Yes, but if you are in India for all of 2017, WHY would you file?
    lalji's Avatar
    lalji Posts: 81, Reputation: 2
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    #5

    Mar 13, 2016, 05:52 PM
    I am considering if I should do a 401K withdrawal either this year or next year?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #6

    Mar 13, 2016, 05:58 PM
    You should wait until you return to India if you do the withdrawal. That way, no STATE income taxes will be due.

    Better yet, roll the money over into a IRA and manage it from India using the Internet.
    lalji's Avatar
    lalji Posts: 81, Reputation: 2
    Junior Member
    		  
    #7

    Mar 13, 2016, 06:25 PM
    Are there any state taxes if I make a 401K withdrawal? I currently live in Illinois?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #8

    Mar 13, 2016, 07:27 PM
    Yes. If you make the withdrawal while living in Illinois, the state of Illinois considers it Illinois-based income and will tax it accordingly.
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