# income tax on 401(K)



## surabela (May 13, 2016)

Can anyone tell us how we will be taxes on withdrawals or disbursements from a 401K)? Thanks!


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## skip o (Aug 1, 2011)

My belief is that investments within the 401k will not be taxed in Spain, but when you withdraw any money, Spain will tax it as income. My recommendation is that you talk to many accountants and see if there is a consensus. I have talked to literally 20+ accountants and they contradict each other on almost everything. And Spain LOVES to levy huge fines against people (not accountants) who make mistakes.


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## src6 (Aug 15, 2016)

Just remember that 401(k) disbursements are meant to be taxed, so either the US is going to get their bite or Spain will. Now, a Roth IRA would give you tax-free disbursements in the states, but I have no idea what Spain would do to it.


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## Bevdeforges (Nov 16, 2007)

Take a look at the US-Spain tax treaty. Normally somewhere around Article 18 they put the discussion about pension plans. If it's like some of the other tax treaties, there should be a list of US retirement funds that are treated for tax purposes as "government sponsored pension plans" and that list should specify IRAs and 401Ks among others.

Basically, however Spain wants you to declare and/or pay tax on your US Social Security, that should be the same way you handle 401K withdrawals. (Generally speaking they are taxed either by the country they are coming from - i.e. the US - or the country of residence of the taxpayer - i.e. Spain. But not by both.)
https://www.irs.gov/businesses/international-businesses/spain-tax-treaty-documents

Cheers,
Bev


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## Elyles (Aug 30, 2012)

surabela said:


> Can anyone tell us how we will be taxes on withdrawals or disbursements from a 401K)? Thanks!




We have lived here four years and have both US and Spanish accountants. Go onto the IRS website and find the exemption form (I think it is 8802?) Anyway, the tax treaty prohibits double taxation and if your income is from the US and you pay tax on it there, you do not pay here. 


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