Hello,
I'm a Canadian and live in Canada. I have a 1042-s for my 401k withdrawal in
2014 (small amount, less than $2000). This is my only US source income. The
tax withholding rate is 15% (I filled W8BEN). Does this tax withheld satisfy
my tax liability for US so I don't need to file my US tax return? I think 15%
already covers the 10% early withdrawal penalty. Also the amount I withdrew is
less than the deductions of exemptions.
Thank you.
Canadian 401k withdrawal
Moderator: Mark T Serbinski CA CPA
The 15% is only the income tax, and does not include the penalty. That said you do not have to file a tax return, the company should have withheld more.
Use the 15% tax as a credit on your Cdn return.
Otherwise, you could file a 1040NR and pay the penalty, and add the 10% penalty to your credit on Cdn return.
Use the 15% tax as a credit on your Cdn return.
Otherwise, you could file a 1040NR and pay the penalty, and add the 10% penalty to your credit on Cdn return.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
That is correct, but why bother? You owe more than this to Canada, so you are simply redistributing the tax.
Besides, it is debatable whether 401(k) is connected (gradual tax) or non-connected (flat treaty tax rate).
Besides, it is debatable whether 401(k) is connected (gradual tax) or non-connected (flat treaty tax rate).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing