I need help, and perhaps I've got to go to someone who knows about all of the obscure things which I don't know or understand about tax on US citizens, who came to Canada without a care and now find ourselves with too many headaches. We have limited financial resources, so reference to an advisor may not be feasible. We live in Toronto.
I'd like advice whether Canadian Locked-In Retirement Accounts- LIRA (for a US citizen, 22-year permanent resident of Canada) which prior to age 65 or after, if not withdrawn from, is supposed to be claimed on the FBAR form if any of our accounts have above S10,000. My husband turned 65 in 2012. I understand that all accounts over $10,000 total in banking institutions were to be reported (in our case in arrears, as we only found out about FBAR last year, and need to file 5 other prior years). As I didn't understand whether locked-in pension plans from work (my husband has 2, one from 1996 and one from 2003), were taxable by the US prior to retirement, it hasn't been claimed on Form 8833 to defer taxation until a benefit has been received or with FBAR, because my information said banking institutions, not insurance companies. I'm not sure whether the LIRAs are still locked-in or not, but either way, we were unaware that we had to claim these. Can you advise as to what to put on Form 8833 for all the LIRAs which haven't been submitted to request that the 2 LIRAs be deferred. We thought that, until he actually received the income, a locked-in pension account to which my husband had no signatory right, until he retired at 65 or so, exempted him from declaring the yearly ups, sideways, and the 2008 40% downturn, that the insurance companies reported. Talk about being scared, it's frightening that the US can penalize us and probably wipe out my husband's small pension with heavy fines.
Also, for CPP and OAS, advice is needed as to how to claim exemption from US tax under The US/Canada Treaty, because Form 8833 has 4 convoluted Lines requiring specific information, stating which treaty Article(s) and #s on Line 1b are being claimed to justify filing, Line 2 requires a listing of code provisions overruled or modified (perhaps the saving clause which could be used to negate the treaty, as we are US citizens residing in Canada), Line 4 requires an explanation of the listing of the limitation of benefits, and Line 5 requires an explanation of the tax position taken. Do you have a brief way of explaining all this on all of the lines, like, "as per US/Canada Treaty Articles XVIII, citing #s"? I don't know what Article #s apply.
On the 1040 form Line 20 is the total of CPP and OAS supposed to be declared and then the same amount supposed to be written as 0 on 20b, with Form 8833 submitted for this line? What about the LIRA, mentioned above, once it is received? The same declaration on Line 16a and 0 on Line 16b, or does this get double-taxed unless I file a Form 1116?
Last does anyone know of a posting on You Tube or any website where there are filled-in 8833 forms, to help people properly fill out the form?
Thank you.
Help needed US Taxes, Forms, US citizen, resident of Canada
Moderator: Mark T Serbinski CA CPA
Your LIRA was ALWAYS supposed to be reported, both on FBAR and 8891.
Without reading your lengthy post, I would suggest reading threads on this site and coming back with questions that you specifically can't find answers for,
Without reading your lengthy post, I would suggest reading threads on this site and coming back with questions that you specifically can't find answers for,
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
lzbth: "I understand that all accounts over $10,000 total in banking institutions were to be reported ..."
It sounds as though you misunderstand (or imprecise wording). The need to file an FBAR is triggered if the TOTAL of ALL of your foreign accounts (and those of others if you have signatory power), exceeds $10,000 at any time during the year. It may be that no one account exceeds $10,000, but you still must file if the TOTAL exceeds $10,000. And if the need for an FBAR is triggered, you must report ALL accounts, whether over $10,000 or not, no matter how small the balance.
It sounds as though you misunderstand (or imprecise wording). The need to file an FBAR is triggered if the TOTAL of ALL of your foreign accounts (and those of others if you have signatory power), exceeds $10,000 at any time during the year. It may be that no one account exceeds $10,000, but you still must file if the TOTAL exceeds $10,000. And if the need for an FBAR is triggered, you must report ALL accounts, whether over $10,000 or not, no matter how small the balance.