Left Canada and quit work, no income in US. One question.

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Hestati
Posts: 13
Joined: Sun Sep 21, 2014 1:28 pm

Left Canada and quit work, no income in US. One question.

Post by Hestati »

Good afternoon,

My situation is simple and complicated at the same time.

I got my green card in June, quit Canadian job on August 1st and crossed the border on August 7th.
For now, I have no income and will not have any income (in fact I am travelling in South America) for the rest of 2014, so ONLY income this year was from my Canadian job.

I have my RRSP which I will pull out later at 25% withholding tax.

I have my locked-RRSP which I will pull out after two years of being non-resident of Canada.

I have no property, stocks or any kind of investment, no car, no furniture, NOTHING in Canada except cold cash in my bank accounts (even RRSP is cash).

My wife is American and she has 0 income for past 3 years, so she doesn't even file the return.

This was a simple part, now main question.

When I file my CANADIAN return for 2014, does CRA care that I only spent 7 months in Canada? Let me explain it clearly. Suppose my income was 60,000/year, so I was taxed accordingly. Since I quit in the middle of the year, I only made 30,000, so my early income is in fact 30K, not 60K. Will I get the tax refund, or CRA will consider it as 30k for half a year, which is the same as 60k/year so refund for me? If that is the case, isn't it better to remain a resident for the rest of the year (for tax purposes) and declare my income as 30k/year.

At which instant and HOW do I tell CRA that I left the country? I suppose it is when filing my 2014 return, is this correct?

Hope my questions are clear.

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

Post by JGCA »

If you and your wife now reside in US and severed ties in Canada then you are leaving Canada and will simply file a departure T1 in Canada . On this tax return you will indicate the date you left Canada and since you have no other property other than RRSP the departure tax will not be an issue so yes you should be getting a refund.

On the US side you should still file a return even if no income because you need to disclose and possible defer the RRSP growth while in the US until the time you start to take out money which Canada will take witholding tax and US will tax the portion from date of arrival values.
JG
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

And as to the tax rate, while you are noarmally only given partial credits on your Cdn return in the year you move, because your world income is zero, you are entitled to the full credits, so you will be taxed like someone who made, in your example, $30K for the entire year.

For US, you should file a part year return as well (1040 for the second part, 1040NR for the first), giving your GC award date as the date of residency.

As to "telling" CRA, the retirn next spring is sufficient. However you should have already informed your RRSP manager, and neither of you should be collecting any Govt benefits based on being a CDn resident (EI,GST,CCTB) so you would tell them this NOW.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Hestati
Posts: 13
Joined: Sun Sep 21, 2014 1:28 pm

Post by Hestati »

Thank you! I did not inform my RRSP manager yet, but I am not collecting any benefits. I will let them know soon.

I now have much bigger problem, I cannot open locked-in RRSP to transfer my pension there. They want me to come to the branch, and I am 10000km away, which makes it difficult to come to the branch, which is totally Canadian way, over secure for no reason...
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You should be able to with TD Waterhouse. I have opened 2 accounts without having to go to any branch. You need to push this issue with the agent.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Hestati
Posts: 13
Joined: Sun Sep 21, 2014 1:28 pm

Post by Hestati »

Was it RRSP or locked-in RRSP? Regular RRSP is not a problem, they don't want to open the locked in one...
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

In my opinion, you should not mix different pensions in the same LIRA. The original pensions may have different rules, and when you go to collapse it there may be unnecesary problems or delays.

Simply set up a second LIRA with the new pension plan.

I know that can be done remotely.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

I guess I misunderstood your posts, when you said you HAD a LIRA and are wnating to OPEN the LIRA.

ARe you saying that currently you have no LIRA?

At any rate, as I said, I was able to open RRSP and RRIF remortely, this after being told more than once by TD staff that this was impossible. A LIRA is no different. Its the staff person you need to find.

The fact that youare in Bolivia today doesn't matter. Is it possible to leave the pension as-is for the moment until you return to US? Although even that shouldn't matter.

The POA issue is not important. You don't need it and TD doesn't need to accept it anyways.

There are acouple of other brokerages that deal with US clients.

http://www.pacificapartners.com/mediaed ... K-IRA.html

http://cardinalpointwealth.com/cross-border/

They may be able to help you depending on the size of your holdings.

But I would simply be pushing harder with TD.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
Hestati
Posts: 13
Joined: Sun Sep 21, 2014 1:28 pm

Post by Hestati »

I have regular RRSP, I do not have LIRA. I opened regular RRSP this year strictly for tax purposes, since I will only pay 25% withholding on it instead of 40% which I was supposed to pay otherwise (I had a lot of room in my RRSP).

As for LIRA, TD is a no go, they still do not realize that we are in 21st century. Looks like I can open LIRA with Questrade remotely. I was always happy with Questrade.

Honestly, I should write a book once my whole immigration process ends. My situation was unique at many instances and many professionals gave me completely wrong advices. Thank God there is Internet and people like you answering at the forums, speaking from their experience, rather than from what they think.

Gracias!
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Be careful. Does Questrade know that you will be living in US?

I have not heard Questrade as a firb that allows US clients for registered accounts (no CDn broker can operate an non-shetered account for you).
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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