Leaving the US for good: what do I do with my money, and when?

Why order matters

Most expensive mistakes on the way out are timing mistakes: a 401(k) cashed out in a hurry, a house sold a month after you became a nonresident, a brokerage account closed because the firm found a foreign address. The list runs from before you resign to the first US tax season after you leave. The same steps, with one set of your numbers, are in the plan Moving back to India.

Before you resign

1. Do not cash out retirement accounts by default. Leaving does not force you to take the money. A traditional 401(k) or IRA paid to a nonresident has 30% withheld by default, and before age 59½ an additional 10% tax is still due. The 30% is a deposit, not the final bill: IRS Publication 519 taxes the part that comes from your US work at graduated rates on Form 1040-NR, so a smaller withdrawal can end up taxed below it. The 401(k) withdrawal when leaving the US calculator shows what you keep.
2. Roll a 401(k) directly into an IRA while you still have a US address, if you want one place for it, and update beneficiaries on every account.
3. Check your Social Security record. A retirement benefit needs 40 credits, and with no US Social Security agreement with India, only US work counts. The Social Security for visa holders calculator estimates what a partial career earns.
4. If the job is ending rather than you leaving it, work out your runway with the H-1B layoff runway calculator. An employer that dismisses an H-1B worker before the authorized stay ends must pay the reasonable cost of return transportation (8 CFR 214.2(h)(4)(iii)(E)); resigning does not trigger that rule.

The last 60 days

• Brokerage. Ask each firm in writing whether it keeps accounts for residents of your new country. Policies differ by firm and country; some restrict trading or close accounts. Make sure you can log in without a US phone number. Do not keep a friend's US address on file as your home: your address decides which tax rules the firm applies.
• HSA. It stays yours. Withdrawals for qualified medical expenses stay tax-free under US rules; other withdrawals are taxable and, before 65, carry an additional 20% tax (Publication 969). Keep receipts.
• Indian mutual funds. Most are PFICs, taxed harshly while you are a US person. Run the PFIC calculator before deciding whether to sell before or after you leave.
• The house. Sold while you are still a US resident, there is no FIRPTA withholding (you certify to the buyer that you are not a foreign person), and the home-sale exclusion in Publication 523 may apply. Sold after you become a foreign person, the buyer generally withholds 15% of the price (IRS, FIRPTA withholding), unless the buyer will live in it and the price is USD 300,000 or less; you file Form 1040-NR to get credit, or apply on Form 8288-B for less withholding. Rented out, rent paid to a nonresident is taxed at 30% of the gross unless you choose to treat it as effectively connected income and pay tax on the net (Publication 519).
• Car, lease and cards. An early lease end costs what the contract says, so read it now. Close the cards you will not use, and ask your bank whether it will keep one checking account and one card with a foreign address.
• Departure permit. Publication 519, chapter 11, says most departing aliens need a sailing permit (Form 1040-C or 2063), with several exempt groups. It is requested in person, so check early.
• Estate. For someone who is neither a US citizen nor domiciled here, US-situated assets such as US stocks and funds face US estate tax, with a filing threshold of USD 60,000 (IRS nonresident estate tax FAQ), and India has no estate tax treaty with the US.

The month you leave

• Your residency termination date. Under Publication 519, someone who met the substantial presence test can end US residency on the last day physically present, if their tax home is abroad for the rest of the year and they have a closer connection to that country; otherwise it ends December 31. A green card holder stays resident until permanent resident status ends, and a long-term resident may owe the expatriation tax (Form 8854).
• Your state. Tell it you have left. Some states keep treating you as resident while your domicile stays there.
• Records. Keep your last pay stub, your I-94 travel history and every statement for the year.

After you land

• Give every US bank, broker and plan a Form W-8BEN in place of your W-9, claiming any treaty rate on pensions. Its instructions require notice within 30 days when a change makes the form incorrect.
• Tell your Indian bank you are back. RBI's FAQ says NRE accounts are redesignated as resident accounts, or moved to an RFC account, immediately on return; FCNR deposits may run to maturity.
• Count your days in India. Your first Indian tax years back are usually RNOR years, when India does not tax most income earned and received abroad. The RNOR timeline calculator shows which years.

The next US tax season

• File a dual-status return. A nonresident on December 31 files Form 1040-NR marked "Dual Status Return", with Form 1040 attached as a statement of the resident part of the year (Publication 519). There is no standard deduction, and Publication 519 says 2025 dual-status returns cannot be e-filed.
• Check the FBAR and Form 8938 for that year, since you were a US person for part of it, with the FBAR and Form 8938 checker.
• Expect Form 1040-NR in later years while you have US income such as plan payouts or rent.