Legal Question in Tax Law in Maryland

Multiple country residency

I live in Maryland and intend to move to Canada in 6 years.

I understand that if I'm no longer a resisdent of the US for a long period then I am no longer obligated to certain taxes.

If I am no longer a residents of the US, what taxes would I be obligated to pay in my IRA and 401K ?

If I withdraw less then $7400 per year before taxes kick in can I get get my money out by only payting the 10% penalty of the IRA ?

Please advise.

Thank you


Asked on 6/03/02, 5:23 pm

1 Answer from Attorneys
G. Joseph Holthaus III Law Offices of G. Joseph Holthaus

Re: Multiple country residency

Cashing in a qualified retirement plan results in you paying your ordinary income taxes, both Federal and State, on the gain to your investment. Since the money was deposited without taxation, you also pay ordinary income taxes on the amount contributed pre-tax. Deferring a withdraw is also beneficial as it avoids the additional 10 percent penalty assessed only by the Federal government as consideration with you availing yourself of the benefits contemplated under retirement fund laws. Pension benefits, 401(k), keough, trust accounts, self employment retirement plans, and other similar matters that involve tax ramifications need to be specifically reviewed. Contact a tax accountant, or see a qualified attorney.

G.J. Holthaus

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Answered on 6/03/02, 7:30 pm


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