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401K Convesion for H1b after returning to India


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#1 rahulbansal007

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Posted 22 November 2010 - 02:17 AM

I was working in the US till May 15, 2010 and after that I moved to India because my 6 year H1B visa expired. I haven't found any job in India. Till May 15, I have earned about 34.5K in salary and don't have any other income or interest payments or investments.

I have all my funds in my previous companies 401K account and I was thinking of rolling all the retirement funds into my roth IRA account (which is already open and active). Is it advisible to do it before the end of this year or should do it next year or should not roll over the money at all..... what should I do that will enable me to pay less taxes and avoid paying any penalties. I was on H1B and don't have a green card and not sure about my career path next year.

Please let me know. Thanks a lot for all your help.

#2 pontevecchio

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Posted 22 November 2010 - 09:46 AM

How much money and who is the company involved in maintaining your 401k..vanguard etc? I would also suggest you post this in the appropriate message boards of the entity who makes the Windows Operating system. eg Tax Corner.

#3 Joe.F

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Posted 22 November 2010 - 10:05 AM

That kind of stuff is a bit too complicated to discuss in a forum. You should discuss that with the financial planners that manage the Roth IRA.

#4 Suprano

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Posted 22 November 2010 - 12:57 PM

You can't rollover 401k directly into Roth. You need to first rollover into Rollover IRA then convert it to Roth.

#5 Suprano

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Posted 23 November 2010 - 06:58 AM

For rolling over to to rollover IRA you don't have to pay any taxes or penalty. Generally you have more investment options in IRA than 401k but if you have good investment options and happy with the returns in 401k and there is no fee changed then you may wish to leave it in 401k. If not you can open a free rollover IRA account. When you convert the the amount in IRA to Roth then you will pay taxes on that (it will add to your AGI) you can split it into multiple years to save taxes. There are special advantages of Roth conversion if you do it in 2010. So you should soon do the research and make your decision fast.


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