Serbinski Accounting Firms

Additional questions: 1. When converting Canadian dollars into US dollars for tax return filing purpose what rate should I use – the today’s USDCAD rate (about 1.28) or the rate that was at the time of the actual money transaction? For example when my wife received her payment in Jan 2008 the ra...

>>> 1.Yes, you do need to report the income in US, as RESPs are not sheltered in US. They are like any other bank account or investment account.
>>> 2. You report the income on the interest line of 1040, based on entering it on schedule B, like any other interest your earned from any other non-sheltered investments you have.

Questions 1: so I will pay taxes on the RESP’s income each year. What happens when my kids will borrow money from the RESP – should they pay the taxes again?

Question 2: I’ve looked through the form TD F90-22.1 and it looks now clear to me. I understand that it goes to the Department of the Treasury and I have time until June 30 to file it – it does not need to be filed with the tax return. Is it right?

>>>> The existence of your RESPs ALSO need to be reported on Form 3520.

Question 3: I looked through Form 3520 and I don’t quite understand the idea behind it. Why do I need to file this form after I paid taxes on the income produced on RESP and after I reported all my accounts on TD F90-22.1? Which section of the 3520 applies to my RESP? Do I need to file 3520 each year for my RESPs?

Question 4: I’ve “neglectedâ€￾ my Israeli pension plans for years – I did not bother even to change the address on the accounts after I moved to from Israel to Canada. So I don’t have the statements for years. I am afraid I will not be able to collect all the information about the income generated on this plans before April 15. Can I file an amendment to my income taxes after April 15 and report more income for 2008? Does this incur any penalties from IRS?

Question 5: Is there a way that someone else will review the work of my accountant before I file my taxes? I am afraid she is not competent enough, but since I will be traveling after April 3rd, I don’t have much time to find another accountant now. If I go to IRS office in Seattle can they review the accountant’s work before I file my return?

Thanks!

It looks that my both RESP plans produce income or interest – there are lines in the annual statement of the plans that shows income (interest) earned on the principal and income (interest) earned on the governmental grant. I did not take any money from any of those accounts during 2008 – so all...

>> RESPs: Unfortunately RESPs are not sheltered in US, and thus you now need to report any income they generate every year on your 1040. You also need to file a form 3520 for each RESP. Big headache. See if you can transfer ownership of these to one of the grandparents living in Canada. Question: th...

As the summary of your responses today I understand that although we left Canada in Dec 29, 2007 and lived complete year 2008 in US I still need to file Canadian tax return only for my wife, because she had one payment in January 2008 from her Canadian employer for the work she did in 2007. Also my wife pulled her pension plan in 2007 and paid 25% tax – I understand that she does not need to report her pension plan at all in her T1 for 2008 because it was a final tax. I (husband) did not have any Canadian income in 2008 so I will not file my Canadian income tax for 2008.

Question 1: did I understand it all right?

>> You became non-resident on Dec 29 2007, because that is what was written on your return, and that is when you left Canada. You are liable for a penalty for failure to comply with non-resident sale of property. There is no point complying now, since you have reached the maximum penalty. Let it go, and see if CRA catches it. If they do, pay the fine, If not, good for you.

Question 2: How big is the fine. How is it calculated. Is it legal to do nothing now and just wait what happened? Is there any instruction that says “if you failed to comply with non-resident sale of property and found out you needed – then go ahead and do it nowâ€￾?

What does it mean “have reached the maximum penaltyâ€￾?

>> Cdn pensions/RRSPs

We don’t have RRSP for sure.

Question 3: Both of us were employed in Canada and paid to CPP – I don’t exactly understand what it is but I think it is a mandatory payment to Governmental pension plan – do I need to declare anything like that at all for US tax return?


Thanks!

>> At the same time you make a departure return there are 'departure taxes' due on any investments you held at the time of leaving (excluding >> your home and your RRSPs). Did you have any investments and was such a form and tax paid? We still have two RESP (registered education saving plans) for my...

Your Cdn taxes might need adressing too.

Given the date you left Canada, and assuming you did not file a departure return last year (technically you should have, writing 12/30/07 as departure date) you should be filing a Cdn tax return, with a departure date of 01/01/08. You should not have any income to report, unless you received Cdn wages during 2008 (even if it was for 2007). You will need to comply with various departure requirements, if you did not already do so. You may have a penalty for selling your house if you did not inform Govt that you were non-resident at the time of sale.
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I don’t know what “departure returnâ€￾ is. What we did: we wiled tax return with our Canadian accountant in March 2008 (we were in US already at that time) and told her that we left Canada on Dec 29, 2007. She specified that day on the tax return forms. Later in 2008 my wife received a letter from Canadian government saying that she is not eligible for Canadian Child Tax benefits since she is not resident of Canada.

Please provide your opinion on following:

1. You wrote: “You may have a penalty for selling your house if you did not inform Govt that you were non-resident at the time of sale.â€￾

Question: Can we consider that we informed Canadian Government that we are non-residents?

2. We sold our Canadian house (the primary residence) in Feb. 2008 – my accountant told me we don’t need to file Canadian taxes on that since it is a primary residence.

3. Also, my wife received Canadian T4 for year 2008 with small amount on it ($1200 CAD) for the work she did at the end of 2007 right before we left Canada – this money was forwarded to her account in 2008. I asked my Canadian accountant about that and she told that all I need to do is to show this income when I file income tax in US and don’t do anything in Canada in terms of that.

4. You wrote: “You will need to comply with various departure requirements, if you did not already do so.â€￾

Question: What the requirements are? Where can I read about that?



Thank you!

Me and my wife on TN, both have SSN, our two kids don’t have SSN. We came to US in Dec. 30, 2007. Here are our questions: 1. We want to file tax return so both kids are dependents (TD) – how to do that? What do kids need so that we can file taxes? 2. We sold a house (primary residence) in Canada...