CAD income reporting on 1040

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jodor
Posts: 3
Joined: Wed Mar 30, 2005 9:39 am

CAD income reporting on 1040

Post by jodor » Wed Mar 30, 2005 9:45 am

1. I have a 25% job in Canada, a 75% job in the USA and live in the USA. In reporting my Canadian earned income on 1040 do I deduct the amt paid to CPP and the required contribution to a defined benefits (private) pension plan to arrive at a total to report as earned (foreign) income?

2. Also must I convert the CAD to USD at each pay period or can I use one conversion for the entire year?

3. I presume I must report the “private” pension plan values on the new 8891. What if the plan manager will not give me an end of the year value. I receive a statement once a year with the value on June 30th.

4. Will I be eligible to contribute to my RRSP in 2005 for the income in 2004 even though I live in the USA?

Thank you in advance for any comments

jano

nelsona
Posts: 16413
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona » Wed Mar 30, 2005 10:37 am

1. No. You report the entire wage. You *might* be able to exclude your pension contribution, if your pension plan meets IRS standards (you would need company to tell you). Your CPP premiums are foreign taxes (along with your EI premiums, final fed tax and final prov tax), so you can only claim these as a credit, not merely take them off the top.

2. You can use one conversion, since these are a series of paymentts.

3. No. 8891 is ONLY for RRSPs/RRIFs.

4. Yes, but such contributions will not be tax deductible in US. Focus on your 401(K) and other US deductible palns, since that is where you live. Only after maxing these should you consider RRSPs (espaecially since your contribution room will always be ther, unlike other US plans which are gone after every year.

<i>nelsona non grata... and non pro</i>

jodor
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Joined: Wed Mar 30, 2005 9:39 am

Post by jodor » Wed Mar 30, 2005 11:33 am

Must I report the existance of my Canadian (private) pension plan to the IRS?

jano

nelsona
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Location: Nowhere, man

Post by nelsona » Wed Mar 30, 2005 11:36 am

My opinion, is no.

However, there is no harm in using Rev Proc 2002-23 to report such a pension.


Many are doing this.


<i>nelsona non grata... and non pro</i>

suedor
Posts: 14
Joined: Thu Mar 03, 2005 11:26 pm

Post by suedor » Wed Mar 30, 2005 4:19 pm

The issue of whether one needs to report a pension of this type to IRS seems to be a bit of a gray area. Is it a trust? Some would say yes, some would say no. One of the issues with the poster's situation is that they are also currently contributing to this pension. Do they need to file 3520 because of this and reort also on TDF90.22.1? Good luck trying to report your pension contributions on 3520. You will never get the required info from your pension plan administrators and if you file this form incomplete with the IRS they will, I believe, hound you to the ends of the earth for the missing info, which as I said, you will never get. I remember reading somewhere that you only need to report the pension if you contribute more than 50% to it. I would think this means that if your $$$ are matched by the employer then it need not be reported. However, I do not remember where I read this.
I have a similar situation and the cross border accountant I used to use (stopped because too expensive and I started doing returns myself using his as a template) told me I did not need to report the pension in any way. However, as Nelson said, it appears that some people/accountants file under 2002-23.









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