1) I am a US citizen and a Canadian resident. I have a NY 529 College Savings Plan. As one of my children are about to attend University and I have eligible expenses, I am about to make my first withdrawal.
I noticed that I have the opportunity to have the distribution made to me (the owner) or to my son (the beneficiary). Could you kindly tell me what advantages or disadvantages there are in choosing one over the other, if any?
2) I think this is a good place to ask my second question as the two may dove-tale. I have recently been advised that I need to be completing US tax returns for my two children in order for me to continue claiming them as dependents and to take an exemption. I never had to do this in the past. I believe I may have received this advice because my children are now over the age of 18.
Can you kindly confirm that the advice that I received is correct. AND is it because they are over the age of 18 that I know have this filing requirement? They have had no income and there has been no need to prepare tax returns for them in the past.
DOVETAIL?
If I have NOT received correct advice and there is NOT the need for me to prepare tax returns for my 2 children. It came from a knowledgeable source, so I have a feeling it is probably correct. But anyway, assuming it is not--I would think that would be one reason for me to make the 529 distribution to myself rather than to my son. If I make it to my son, that will definitely trigger a requirement for him to complete a tax return.
One final bit of information so I can receive the proper reply. I will only be making distributions for eligible expenses! So there should be no tax implications regardless of whether the distributions are made to me (the owner), or to my son (the beneficiary).
Thank you for your assistance! I am a former client who has been preparing my own taxes. But I shall be calling shortly as I think I would like to return and benefit from your excellent professional services.
529 College Savings Distributions / Tax Returns for Children
Moderator: Mark T Serbinski CA CPA
I'll leave the 529 issue for later, but there is absolutely no requirement for your children to file a US tax return if the do not meet either the income or unearned income thresholds for filing.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
I made a mistake. I was advised that my children should be filing CANADIAN tax returns. Again, they have never had this requirement before. I'm told if I will be taking some sort of credit for them, that they have to file this Canadian return. It would be a nil return since they have no income. Does this make sense?
Will my 529 question be addressed? When/Where? Thanks!
Will my 529 question be addressed? When/Where? Thanks!
Cdns of any age and any income level do not have to file a return unless the owe tax, or they have another specific filing obligation, which are listed on the "who should file?" section of any guide.
It might be for the tuition and education credit/deduction, which must be used by the student first, then the parent.
Nothing to do with 529 though.
It might be for the tuition and education credit/deduction, which must be used by the student first, then the parent.
Nothing to do with 529 though.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
I have no issue with filing Canadian income taxes for kids. Just trying to understand why I am being advised to do so. I have an email to Mark and Stephen to discuss re-engaging you. If I do, I will address this issue in detail as it appears it will not be so simple to resolve on this forum.
In the meantime, can you address my totally separate issue (which I think should be more straightforward and simple):
I am a US citizen and a Canadian resident. I have a NY 529 College Savings Plan. As one of my children are about to attend University and I have eligible expenses, I am about to make my first withdrawal.
I noticed that I have the opportunity to have the distribution made to me (the owner) or to my son (the beneficiary). Could you kindly tell me what advantages or disadvantages there are in choosing one over the other, if any?
My form is complete and I am just waiting to tick off whether distribution will be made to me or my son. Just want to be cautious and get your feedback before ticking and sending.
THANKS!
Jeff
In the meantime, can you address my totally separate issue (which I think should be more straightforward and simple):
I am a US citizen and a Canadian resident. I have a NY 529 College Savings Plan. As one of my children are about to attend University and I have eligible expenses, I am about to make my first withdrawal.
I noticed that I have the opportunity to have the distribution made to me (the owner) or to my son (the beneficiary). Could you kindly tell me what advantages or disadvantages there are in choosing one over the other, if any?
My form is complete and I am just waiting to tick off whether distribution will be made to me or my son. Just want to be cautious and get your feedback before ticking and sending.
THANKS!
Jeff
The tax filing issue is the simple one, so since you are already going to talk to serbinski (I am not affiliated with them) on that issue, then I suggest you also discuss that one.
I think I already explained why they will file: to prove that you can take the tuition and education amounts since they won't need them.
I think I already explained why they will file: to prove that you can take the tuition and education amounts since they won't need them.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing