Hi there,
I moved to US from Canada in November 2014. I have declared my non-resident status on my Canadian return for 2014. One thing I did not do is close my tax free saving accounts. I have not yet finished doing all my research, but I am planning a trip back to Canada to do everything I need to prepare for. Some questions:
1. I have two TFSA with Scotiabank, one is cash, the other is a GIC with a maturity date in 2018. I believe I will get penalized for closing the later, should I still do it anyways?
2. What information should I gather from my bank? Is there any paper that I, or the bank need to sign for 3520/3520-A purpose?
3. For 2015, the only source of Canadian income I am expecting is interests earned from my CAD savings accounts (roughly $500). Do I still need to file a Canadian return? Or do I need to report this on my US return?
4. What is the best advice on RRSP? I have read that non-residents cannot make RRSP contributions, but should I leave it? And do I need to report it anywhere? I have a small amount of RRSP (~$5000)
Thank you!
Becoming non-resident and closing TFSA
Moderator: Mark T Serbinski CA CPA
Just so we are clear, having a TFSA doesn't impact your Cdn residency. It is merely a secondary, unimportant tie.
1. There is nothing "wrong" with having a TFSA while being a US tax resident. it is simply a "problem", since it has extra reporting requirements, and is not tax-free in US. So, if you are willing to do the extra reporting, and pay the year-by-year tax, you can keep all the TFSAs you want. Since you are subject to the reporting for 2015 anyways, itwould not incur a penalty just to close it now.
2. There are TFSA/3520 threads here. please read.
3. Once you filed your emigrant return, there are only a few items that need to be reported on a Cdn tax return. bank interst is NOT one of them (in fact, you should not have included any interst earned after Nov 2014 on your last Cdn return. Most Cdn income you will now ear will ewither be tax-free (like interst) or flat taxed (like RRSP withdrawl). You have filed your last Cdn return until you move back.
4. RRSPs remain shelterd while living in US. But they do form part fo your foreign assets, which should be reported on FBAR (along with your TFSAs). Personally, I would close them, pay the 25% Cdn tax, and use the tax asa dedcution on my next US return. You have told the RRSP and TFSA managers that you live in US, right?
1. There is nothing "wrong" with having a TFSA while being a US tax resident. it is simply a "problem", since it has extra reporting requirements, and is not tax-free in US. So, if you are willing to do the extra reporting, and pay the year-by-year tax, you can keep all the TFSAs you want. Since you are subject to the reporting for 2015 anyways, itwould not incur a penalty just to close it now.
2. There are TFSA/3520 threads here. please read.
3. Once you filed your emigrant return, there are only a few items that need to be reported on a Cdn tax return. bank interst is NOT one of them (in fact, you should not have included any interst earned after Nov 2014 on your last Cdn return. Most Cdn income you will now ear will ewither be tax-free (like interst) or flat taxed (like RRSP withdrawl). You have filed your last Cdn return until you move back.
4. RRSPs remain shelterd while living in US. But they do form part fo your foreign assets, which should be reported on FBAR (along with your TFSAs). Personally, I would close them, pay the 25% Cdn tax, and use the tax asa dedcution on my next US return. You have told the RRSP and TFSA managers that you live in US, right?
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Hello,
My wife and I are considering accepting job offers based on TN visas
and moving to the US sometime early in the new year (January/February 2016) and quitting our jobs in Ontario towards the end of 2015 (November/early December).
I would be most thankful for your advice in regard to the following concerns:
1) In moving to the US in January/February 2016 (we'll be residents of Canada for tax purposes until such a date)…am I correct in assuming that we do not need to file an American tax return in the spring of 2016 in relation to our Canadian income and RRSP and TFSA accounts? and that we will need to file our very first US tax return in March 2017?
2) When should the departure tax return be filed with CRA? Following our departure or at the same time of our Canadian tax return filing in the spring of 2016?
3) I understand that it would be wise to close our TFSA account this year prior to departure as this investment greatly complicates tax filing in the US. Our TFSA account (30K) is tied up as a GIC/mutual fund for 2 more years.
Do you think that liquidating our TFSA account makes more sense (less complications/headaches) than if we were to keep it open and report it as a foreign trust regardless of what the penalty might be for closing it?.
Thank you in advance for your help.
My wife and I are considering accepting job offers based on TN visas
and moving to the US sometime early in the new year (January/February 2016) and quitting our jobs in Ontario towards the end of 2015 (November/early December).
I would be most thankful for your advice in regard to the following concerns:
1) In moving to the US in January/February 2016 (we'll be residents of Canada for tax purposes until such a date)…am I correct in assuming that we do not need to file an American tax return in the spring of 2016 in relation to our Canadian income and RRSP and TFSA accounts? and that we will need to file our very first US tax return in March 2017?
2) When should the departure tax return be filed with CRA? Following our departure or at the same time of our Canadian tax return filing in the spring of 2016?
3) I understand that it would be wise to close our TFSA account this year prior to departure as this investment greatly complicates tax filing in the US. Our TFSA account (30K) is tied up as a GIC/mutual fund for 2 more years.
Do you think that liquidating our TFSA account makes more sense (less complications/headaches) than if we were to keep it open and report it as a foreign trust regardless of what the penalty might be for closing it?.
Thank you in advance for your help.
1.Correct
2. Spring 2017, in you leave after December 31 2015.
3. I would close it. You could make an in kind replacement and then close the TFSA with only cash in it. Otherwise I would consider the interest in GIC lost.
2. Spring 2017, in you leave after December 31 2015.
3. I would close it. You could make an in kind replacement and then close the TFSA with only cash in it. Otherwise I would consider the interest in GIC lost.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
If the TFSA account (invested with mutual fund) and non-registered investment account were closed before moving to USA. File 1040NR and 8833 for the portion while I works in Canada; and the rest of the year 1040 while lives in USA. should I file FBAR to mention those TFSA investment account and non-registered investment accounts as well (even though closed before move to USA)?
Another question，I just sold the mutual fund today at my TFSA at TD direct investment. But they told me they can not close the account until the money settles down which will be Tuesday next week and I will be in US at that time....In this case, 1) I should I file 3520 to report the cash value (about 3k) in this account on the date I leave Canada?
2) How about my other TFSA which already closed before I moved to US? My guess is I don't need to mention them, right?
2) How about my other TFSA which already closed before I moved to US? My guess is I don't need to mention them, right?