what happens to IRA/roth IRA when moving out of the country

[vviti]

I am wondering what will happen to my IRA account when/if I move out of the country. I read on an old post that the IRS will deduct 10% plus 10% penalty for early withdrawal for a regular IRA, no matter where you are, or of your income (in that case they were talking about India). I have not been able to find information on early withdrawal for foreign residents (i.e. without a US income). However, how would that work with a Roth IRA? since I have already payed income taxes on a Roth IRA, if i move to another country and the IRS is still subtracting 20% independently of my income, it seems as if it'd be more convenient to open up a traditional IRA account.

 

[RahulMehta]

I am wondering what will happen to my IRA account when/if I move out of the country. I read on an old post that the IRS will deduct 10% plus 10% penalty for early withdrawal for a regular IRA, no matter where you are, or of your income (in that case they were talking about India). I have not been able to find information on early withdrawal for foreign residents (i.e. without a US income). However, how would that work with a Roth IRA? since I have already payed income taxes on a Roth IRA, if i move to another country and the IRS is still subtracting 20% independently of my income, it seems as if it'd be more convenient to open up a traditional IRA account.

Roth IRA contribution is tax free when withdrawn however the earnings those IRA funds is taxed when withdrawn.

10% early withdrawal penalty is incurred on all withdrawals unless they are qualified.

Moving to another country does not alter this as the contribution and earnings on them are all US income.

In short all US income is taxed in US whereever you may be.

Consult a Tax professional before taking any steps in th ematter.

IMHO all temporary workers in US should avoid such Tax bumps. The tax savings are really not worth the trouble they cause. Why lock up the funds? It is your money, you should be able to control it whenever and whereever you want.

It is a different matter if you are a PR or a citizen.