Hi,
I have been working in US for a few years, and am thinking about moving back to Canada later this year. I have a traditional IRA account with TD Ameritrade, and would like to leave the money over there.
I talked to an IRA expert at TD Ameritrade, and this is what I was told. After I change to Canadian address, I will have to move the money into a non-resident IRA account, with a 15% withholding tax to treasury. I will not have to pay the 10% penalty tax as long as I do not withdraw money. I may get some withholding tax back at the time I file the tax return.
Does it sound right?
I am aware that many US brokerages will ask clients to close their IRA accounts or move to somewhere when you change your address to Canada. Are there any other brokerages that can keep IRA accounts for Canadians?
I also have a stock account with TD Ameritrade, and was told I will have to close that account once I change my address.
Do US banks (for example, Bank Of America) let non-residents keep their bank accounts?
Thanks for your inputs,
Frank
What to do with my IRA account after leaving US?
Moderator: Mark T Serbinski CA CPA
Your bank account will befine, since you have an SSN.
Your brokerage account wil need to be closed, with what can be transferred moved to a Cdn brokerage. Mutula funds will have to be sold.
For your IRA, you should not have to pay any tax until you withdraw the money. DO NOT accept that they tax you on that money now.
many instead convert the IRA to a Roth before leaving, so that they pay the tax now, and then it will be tax free in US and canada forever. Something to consider.
Other wisw you face the prospect of having funded the IRA at 15% deductiona and having it taxed (in canada at 40%). Not the best scenario.
Your brokerage account wil need to be closed, with what can be transferred moved to a Cdn brokerage. Mutula funds will have to be sold.
For your IRA, you should not have to pay any tax until you withdraw the money. DO NOT accept that they tax you on that money now.
many instead convert the IRA to a Roth before leaving, so that they pay the tax now, and then it will be tax free in US and canada forever. Something to consider.
Other wisw you face the prospect of having funded the IRA at 15% deductiona and having it taxed (in canada at 40%). Not the best scenario.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
nelsona's comments, as always, are sound. Especially on converting to a Roth if you can afford the tax now. You must do so before leaving for Canada.
I have some recent experience with TD Ameritrade. My wife and I now live in Canada again, and in November, renounced our Canadian citizenship. Our current IRA broker is freezing the IRA (no trading), but will not force it closed. (This may be standard.) However, we had enough discussions with TD Ameitrade, and the chap checked with more knowledgeable people there, and we can transfer our IRA's to them, and they will allow trading. I believe this is because they are owned by the TD Group in Canada, and they piggyback on their ability there to serve Canadian residents. We also have after-tax funds with TD Waterhouse here in Canada.
You should have 15% US tax withheld on withdrawals as TD Ameritrade and nelsona say, and you can get a credit for that on your Canadian tax.
Best is to convert to Roth before leaving and avoid taxes in both countries. Trading is an issue, but it appears TD Ameritrade may be OK.
We are moving the smaller IRA first (in process), and I hope to post that it has been successful.
I have some recent experience with TD Ameritrade. My wife and I now live in Canada again, and in November, renounced our Canadian citizenship. Our current IRA broker is freezing the IRA (no trading), but will not force it closed. (This may be standard.) However, we had enough discussions with TD Ameitrade, and the chap checked with more knowledgeable people there, and we can transfer our IRA's to them, and they will allow trading. I believe this is because they are owned by the TD Group in Canada, and they piggyback on their ability there to serve Canadian residents. We also have after-tax funds with TD Waterhouse here in Canada.
You should have 15% US tax withheld on withdrawals as TD Ameritrade and nelsona say, and you can get a credit for that on your Canadian tax.
Best is to convert to Roth before leaving and avoid taxes in both countries. Trading is an issue, but it appears TD Ameritrade may be OK.
We are moving the smaller IRA first (in process), and I hope to post that it has been successful.
Thank you all for your replies! I talked to another IRA people at TD Ameritrade, and he said I can keep my IRA account over there after I change my address to Canada. The first person I talked to was not very knowledgeable, he had to check the documents and asked around when he was answering my questions.
This is an old post but my question seems most related to it. For some reason I'm having trouble finding information on this.
I am a dual citizen, born in Canada, and I worked in the US from 2008-2010, and contributed to an IRA there. After leaving the company and returning to Canada, I switched to a roll-over IRA with Charles Schwab as they would allow me to continue trading from Canada. I am now contemplating relinquishing my US citizenship, and one concern is if anything happens to my IRA even though its not a lot of money in the long run. I will obviously have to ask Charles Schwab if I can still trade as a non-US citizen- if not it sounds like TD Ameritrade may be an option. Is there a tax that would be applied to my IRA when I renounce? Would receiving distributions in retirement be taxed differently if I renounce? Is there any thing I should do with it before I renounce? Not sure if Roth helps if I'm already out of the country.
Hoping someone could advise or point me to a forum topic that may have already discussed this.
I am a dual citizen, born in Canada, and I worked in the US from 2008-2010, and contributed to an IRA there. After leaving the company and returning to Canada, I switched to a roll-over IRA with Charles Schwab as they would allow me to continue trading from Canada. I am now contemplating relinquishing my US citizenship, and one concern is if anything happens to my IRA even though its not a lot of money in the long run. I will obviously have to ask Charles Schwab if I can still trade as a non-US citizen- if not it sounds like TD Ameritrade may be an option. Is there a tax that would be applied to my IRA when I renounce? Would receiving distributions in retirement be taxed differently if I renounce? Is there any thing I should do with it before I renounce? Not sure if Roth helps if I'm already out of the country.
Hoping someone could advise or point me to a forum topic that may have already discussed this.
(1) I don't know about Schwab, you'll have to check with them.
(2) No tax at renunciation if you are not a "covered" expatriate (you are a covered expatriate if your income is too high, or your worldly assets are too much, or you can't swear to your last five years of tax returns, or you don't file form 8854 correctly and on time - see form 8854 instructions and/or Phil Hodgen's web site).
(3) Yes. Before renunciation, you pay US tax on your world income, and any IRA withdrawal is taxed at your marginal rate, whatever that is. After renunciation (assuming your are an uncovered expatriate), it is taxed at a flat 15% for periodic payments (by treaty), but possibly at 30% for a lump sum withdrawal (the treaty only guarantees 15% for periodic payments, but IRS instructions currently show 15% for any withdrawal by a Canadian resident, so the situation is a bit unclear).
(4) It would have been good to convert to Roth before moving, too late now. Nothing else to do before renunciation, except that if your current US and Canadian/provincial marginal tax rates should be less than 15% (unlikely), you'd save money by withdrawing before renunciation.
Be sure your last five years tax filings and required reports (e.g., FBAR etc.) are impeccable *before* the date of your renunciation, filing any amended returns before that date. Otherwise, you will be a "covered" expatriate, and subject to additional burdens now, and also when you die.
(2) No tax at renunciation if you are not a "covered" expatriate (you are a covered expatriate if your income is too high, or your worldly assets are too much, or you can't swear to your last five years of tax returns, or you don't file form 8854 correctly and on time - see form 8854 instructions and/or Phil Hodgen's web site).
(3) Yes. Before renunciation, you pay US tax on your world income, and any IRA withdrawal is taxed at your marginal rate, whatever that is. After renunciation (assuming your are an uncovered expatriate), it is taxed at a flat 15% for periodic payments (by treaty), but possibly at 30% for a lump sum withdrawal (the treaty only guarantees 15% for periodic payments, but IRS instructions currently show 15% for any withdrawal by a Canadian resident, so the situation is a bit unclear).
(4) It would have been good to convert to Roth before moving, too late now. Nothing else to do before renunciation, except that if your current US and Canadian/provincial marginal tax rates should be less than 15% (unlikely), you'd save money by withdrawing before renunciation.
Be sure your last five years tax filings and required reports (e.g., FBAR etc.) are impeccable *before* the date of your renunciation, filing any amended returns before that date. Otherwise, you will be a "covered" expatriate, and subject to additional burdens now, and also when you die.