[z754103]

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!

[applefan]

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

[whong]

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.

[cosmokat]

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.