What happens if you cash your 401K and run away forever?
Thursday, February 18th, 2010 at
5:50 pm
zaxxon asked:
What if, in the hypothetical case, I cashed my 401K, paid nothing to the IRS and ran away to a foreign country to never come back to the US?
What if, in the hypothetical case, I cashed my 401K, paid nothing to the IRS and ran away to a foreign country to never come back to the US?
Tagged with: 401k • Hypothetical Case • Irs
Filed under: Retirement
Like this post? Subscribe to my RSS feed and get loads more!
They’ll get the tax when you cash it out. So you can run, but you can’t hide!
You can’t. 20% of the balance will be withheld unless you ask to have MORE withheld. That won’t cover all of your taxes. The IRS may decide to chase you down if you owe enough. Also note, unless you FORMALLY renounce US citizenship, your WORLDWIDE income is still subject to US tax law.
Probably not much, but if you ever did want to come back, you’d owe a ton of interest and penalties in addition to the original tax amount.
Some countries do have treaties that would allow the IRS to track you down there, but it wouldn’t be very likely to happen.