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Subject:  Re: Is a 401k a bad choice for us? Date:  2/3/2004  10:16 AM
Author:  yobria Number:  38908 of 88542


How is your husband able to earn $80K free of federal taxes? I thought you had to pay US taxes on foreign income, though you could net out the foreign taxes paid.

If what you say is true, the 401k may still be a good deal. If the money you put in this year is truly tax free, it might be considered part of your tax basis in the account and would not be taxed at withdrawal. Once in the 401k, the money would compound tax free, though you wouldn't get preferential cap gains tax treatment on withdrawal.

But I don't really know what the rules are in your situation.

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