Misinformed by H&R Block Master Tax Specialist?

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ethomps
Posts: 11
Joined: Fri Mar 13, 2015 6:44 pm

Misinformed by H&R Block Master Tax Specialist?

Post by ethomps »

Hello again,

On Thursday, my wife and I took a trip to one of the H&R Block Premium locations here in South Carolina to speak with one of their Canadian tax specialists. She was in fact Canadian herself, so I had hope that she knew what she was doing when she left Canada.

When I met with her to talk about a Canadian Departure Tax return, she looked quite confused at my request. She said that since I had no Canadian/U.S. income for 2014, that I don't need to file a Canadian Tax return-- and that once again she had never heard of a "Departure Return".

She then pulled up an NR73 and asked if that's what I was referring to-- in which she said she wouldn't recommend filling that out either, I quote her "Why give the Canadian government the opportunity to say if you are/aren't a resident?"

I believe her intentions were well, but I can't say I feel confident in her advice. I'm now at the point where I feel like I probably need to do this myself, however I have no idea where to start or what forms are needed.

She also said the only form I need to submit about my Canadian TFSA is the FBAR (only for 2014 since it fell below 10K before 2015), and that I submit that separately from my US Income Tax. Is this true or are there other forms that I needed to include?

Much appreciated, and sorry for the long post.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

She is right on 1 count. NR73 should not be sent until/unless CRA requests it.

She is wrong about TFSA, and all other matters, as usual from HRBLockheads.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ethomps
Posts: 11
Joined: Fri Mar 13, 2015 6:44 pm

Post by ethomps »

[quote="nelsona"]She is right on 1 count. NR73 should not be sent until/unless CRA requests it.

She is wrong about TFSA, and all other matters, as usual from HRBLockheads.[/quote]

HRBlockheads haha, I like that one!

May I ask which forms I need to fill out for my TSFA? And if any of these were supposed to be sent off with mine and my wife's joint return?

Also, what forms are needed for a Canadian departure return? I had no Canadian income, investments, property etc etc. Just a TFSA and a couple thousand dollars in my basic bank account. And I was only present for the month of January, I left for the US on February 1st, and got married later that month. So on my departure return do I file as "single" since I wasn't married for the only month I remained in Canada?

Much appreciated
JGCA
Posts: 754
Joined: Thu Nov 18, 2010 3:05 pm
Location: Montreal, QC Canada

Post by JGCA »

TFSA are not tax free in the US any income they generate will be subject to US tax unlike the tax shield they enjoy in Canada, FBAR form are not for paying tax they simply record tha fact that you have foreign accounts of which tfsa MAY BE ONE OF THEM YOU STILL HAVE TO FILE AND PAY TAX ON THE INCOME.

DEparture tax return is a retuen you file in Canada when you leave its your T1 tax return with a departure date indicated on it and you are deemed to have sold all your assets except for taxable Canadian property once you leave and you pay departure tax on any gains, you then have this as your new cost .
JG
ethomps
Posts: 11
Joined: Fri Mar 13, 2015 6:44 pm

Post by ethomps »

[quote="JGCA"]TFSA are not tax free in the US any income they generate will be subject to US tax unlike the tax shield they enjoy in Canada, FBAR form are not for paying tax they simply record tha fact that you have foreign accounts of which tfsa MAY BE ONE OF THEM YOU STILL HAVE TO FILE AND PAY TAX ON THE INCOME.

DEparture tax return is a retuen you file in Canada when you leave its your T1 tax return with a departure date indicated on it and you are deemed to have sold all your assets except for taxable Canadian property once you leave and you pay departure tax on any gains, you then have this as your new cost .[/quote]

Thank you for your response! I'm incredibly new to all of this, and really appreciate this community.

I spent the past 4 hours reading the forum, IRS website, and a few other sources on this TFSA headache. Are the following forms all I need?

1 - 1040 Schedule B
2 - FinCEN Report 114/FBAR
3 - Form 3520
4 - Form 3520A
5 - Form 8938
6 - PFIC??
7 - FATCA??

Did I missing anything?
ethomps
Posts: 11
Joined: Fri Mar 13, 2015 6:44 pm

Post by ethomps »

Am I understanding the purpose of each form correctly? Spent a good 10+ hours reading other threads, as well as information all over the web. This tax stuff doesn't come naturally to me haha.

1 - 1040 Schedule B (Reporting the $300 in interest from TFSA)

2 - Form 3520 & Form 3520A (If my TFSA is set up as a trust, instead of a deposit or annuity contract)

3 - Form 8621 (Only if my TFSA had mutual funds or other PFIC's? Mine was just 100% cash.)

4 - FinCEN Report 114 | FBAR (Since exceeding 10K during calendar year)
JGCA
Posts: 754
Joined: Thu Nov 18, 2010 3:05 pm
Location: Montreal, QC Canada

Post by JGCA »

yes looks like yiu have most of the required forms it of course depends on your actual situation but this should cover it
JG
ethomps
Posts: 11
Joined: Fri Mar 13, 2015 6:44 pm

Post by ethomps »

Thanks JGCA

I called a cross-border specialist after I quickly realized how unqualified I am to fill out some of these forms. We had a good 30 minute consultation, and I felt very comfortable that she knows her stuff.

I was having trouble trying to find out if my TFSA was structured as a deposit, annuity or trust-- as no one from Scotiabank knew what I was talking about.

The specialist I talked to said the easiest way to find out for sure is to call back and ask to purchase a mutual fund for the TFSA. If they say the account doesn't qualify, than it isn't a trust. Thankfully, mine wasn't.

Hopefully this is of help to someone.
Princess Claire
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Joined: Mon Dec 22, 2014 9:18 pm
Location: Endor

Post by Princess Claire »

[quote="ethomps"]Am I understanding the purpose of each form correctly? Spent a good 10+ hours reading other threads, as well as information all over the web. This tax stuff doesn't come naturally to me haha.

1 - 1040 Schedule B (Reporting the $300 in interest from TFSA)

2 - Form 3520 & Form 3520A (If my TFSA is set up as a trust, instead of a deposit or annuity contract)

3 - Form 8621 (Only if my TFSA had mutual funds or other PFIC's? Mine was just 100% cash.)

4 - FinCEN Report 114 | FBAR (Since exceeding 10K during calendar year)[/quote]



If your TSFA is cash only (savings account), wouldn't you also need:

5 - Form 8938 (Fill only Part I and V as a "deposit account")
ethomps
Posts: 11
Joined: Fri Mar 13, 2015 6:44 pm

Post by ethomps »

[quote="Princess Claire"][quote="ethomps"]Am I understanding the purpose of each form correctly? Spent a good 10+ hours reading other threads, as well as information all over the web. This tax stuff doesn't come naturally to me haha.

1 - 1040 Schedule B (Reporting the $300 in interest from TFSA)

2 - Form 3520 & Form 3520A (If my TFSA is set up as a trust, instead of a deposit or annuity contract)

3 - Form 8621 (Only if my TFSA had mutual funds or other PFIC's? Mine was just 100% cash.)

4 - FinCEN Report 114 | FBAR (Since exceeding 10K during calendar year)[/quote]



If your TSFA is cash only (savings account), wouldn't you also need:

5 - Form 8938 (Fill only Part I and V as a "deposit account")[/quote]

Hmm.. do I? I thought the 8938 was only for those with accounts that have an aggregate value of $50K on the last day of the year, or $75K at any point during the year. Actually in my case since I'm filing jointly those values would need to be $100K and $150K.

Unless I've misunderstood something, I'm new to all this.
ethomps
Posts: 11
Joined: Fri Mar 13, 2015 6:44 pm

Post by ethomps »

Also realizing I never really stated anywhere how much I had across the accounts (only $25.5K), sorry about that!
Princess Claire
Posts: 7
Joined: Mon Dec 22, 2014 9:18 pm
Location: Endor

Post by Princess Claire »

Oh ok then
*goes back to her private jet*
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