Ira/401k

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  1. #1

    Join Date
    Feb 2006
    Posts
    829

    Ira/401k

    Would someone subject to US worldwide taxes but receiving only non-US sourced income (in HKD from HK employer) be allowed to contribute to a 401K and/or IRA?

    Thanks!


  2. #2

    Join Date
    Mar 2006
    Location
    Pokfulam
    Posts
    204

    I have almost the exact same question as z754103. Does anyone know the answer to this question? Thanks!


  3. #3

    Join Date
    Jan 2005
    Location
    Eastern District HK; NYC
    Posts
    153

    yes! you may absolutely allow to make contribution to your IRA, but the drawback is that since your gross income earned in HK has been excluded from the $80,000 exclusion for expat, your IRA contribution would lose the tax deduction benefit. If you contribute to an roth IRA, you would not have the tax deduction anyway no matter where you earned your income.

    Therefore, you are absolutely allow to make contribution. any questions, just pm me.

    thanks.

    PS being in HK, our deadline to file 1040 is June 15th w/ extension be filed.


  4. #4

    Join Date
    Mar 2005
    Location
    close enuff to Causeway Bay
    Posts
    132

    You can absolutely invest in an IRA, up to the maximum limit per year. Whether or not it is deductible depends on whether you participated in a 401k during any part of the tax year (so if you worked the full year out of the US) then you likely didn't. Plus, note that tax deduction of your IRA also depends on your income - can't exceed a certain threshold. Another note on the Roth IRA, you can only qualify to invest in a Roth if you do not exceed a certain income level as well - so do make sure you qualify to invest in one first before just going ahead with it.

    Last edited by cosmokat; 05-04-2006 at 04:29 AM.