Is there any basic tips for a dual US/CAN citizen and his Canadian wife moving to the US for the first time. I read something about shuffling your RRSPs - does this apply to both of us? Any other tips to make my life easier?
Thanks,
Ingtar
Tips for moving to States
Moderator: Mark T Serbinski CA CPA
As a US citizen, there is no point shuffling your RRSPs, as your future US tax liability is based solely on your CONTRIBUTIONS (valued at the time you made them) not the book value when you moved.
Your CDn spouse, assuming she has never filed jointly with you, should sell any WINNING investments she has in her RRSP (ie investments which have a higher value now than when she bought them.).
If she has already filed jointly with you, then her book value date has already occured.
Your CDn spouse, assuming she has never filed jointly with you, should sell any WINNING investments she has in her RRSP (ie investments which have a higher value now than when she bought them.).
If she has already filed jointly with you, then her book value date has already occured.
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
[quote="nelsona"]As a US citizen, there is no point shuffling your RRSPs, as your future US tax liability is based solely on your CONTRIBUTIONS (valued at the time you made them) not the book value when you moved.
Your CDn spouse, assuming she has never filed jointly with you, should sell any WINNING investments she has in her RRSP (ie investments which have a higher value now than when she bought them.).
If she has already filed jointly with you, then her book value date has already occured.[/quote]
Can you explain this further? How would this be calculated? Do I need to be keeping track of every RRSP contribution we make? Or would CRA be able to break down what was contribution, what was interest?
Your CDn spouse, assuming she has never filed jointly with you, should sell any WINNING investments she has in her RRSP (ie investments which have a higher value now than when she bought them.).
If she has already filed jointly with you, then her book value date has already occured.[/quote]
Can you explain this further? How would this be calculated? Do I need to be keeping track of every RRSP contribution we make? Or would CRA be able to break down what was contribution, what was interest?
You need to ne tracking your contributions, that deductible ones (ie. all those so far) and the non-deductible ones (ie. the ones that will be made thru employer starting this year).
All US citizens with RRSps do this.
All US citizens with RRSps do this.
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
[quote="nelsona"]You need to ne tracking your contributions, that deductible ones (ie. all those so far) and the non-deductible ones (ie. the ones that will be made thru employer starting this year).
All US citizens with RRSps do this.[/quote]
I thought you said in another thread that RRSP deductions are going to start being deductible with the IRS this year? Sounds like the opposite of above.
Are you saying that if I don't keep track of it now, it will not be possible to discern someday what were contributions and what was interest? I would think that could be calculated in the future? Even if it wasn't clear, couldn't the bank break it down for me someday?
All US citizens with RRSps do this.[/quote]
I thought you said in another thread that RRSP deductions are going to start being deductible with the IRS this year? Sounds like the opposite of above.
Are you saying that if I don't keep track of it now, it will not be possible to discern someday what were contributions and what was interest? I would think that could be calculated in the future? Even if it wasn't clear, couldn't the bank break it down for me someday?
Yes, reverse what I said.
You need to ne tracking your contributions, that non-deductible ones (ie. all those so far and any in the future) and the deductible ones (ie. the ones that will be made thru employer starting this year).
You need to ne tracking your contributions, that non-deductible ones (ie. all those so far and any in the future) and the deductible ones (ie. the ones that will be made thru employer starting this year).
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
[quote="nelsona"]Yes, reverse what I said.
You need to ne tracking your contributions, that non-deductible ones (ie. all those so far and any in the future) and the deductible ones (ie. the ones that will be made thru employer starting this year).[/quote]
Thanks for the clarification. I would think that if I just kept all my RRSP statements, that would be adequate?
You need to ne tracking your contributions, that non-deductible ones (ie. all those so far and any in the future) and the deductible ones (ie. the ones that will be made thru employer starting this year).[/quote]
Thanks for the clarification. I would think that if I just kept all my RRSP statements, that would be adequate?
One should ALWAYS keep all RRSP statement regardless.
However, US taxapayers need to do a little more to keep track of contributions for US purposes. The 8891 form itself does not hold all the required information one will need to accurately determine US tax liability of one's RRSP.
One needs to record the yearly amount of periodic contributions (deductible and non-deductible) as well as the US exchange rate for that year. If one makes lump-sum contributions (typically to personal RRSPs) one should be tracking the US exchnage rate on those days. This is best done yearly rather than trying to do this 30 years from now.
However, US taxapayers need to do a little more to keep track of contributions for US purposes. The 8891 form itself does not hold all the required information one will need to accurately determine US tax liability of one's RRSP.
One needs to record the yearly amount of periodic contributions (deductible and non-deductible) as well as the US exchange rate for that year. If one makes lump-sum contributions (typically to personal RRSPs) one should be tracking the US exchnage rate on those days. This is best done yearly rather than trying to do this 30 years from now.
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
[quote="nelsona"]One should ALWAYS keep all RRSP statement regardless.
However, US taxapayers need to do a little more to keep track of contributions for US purposes. The 8891 form itself does not hold all the required information one will need to accurately determine US tax liability of one's RRSP.
One needs to record the yearly amount of periodic contributions (deductible and non-deductible) as well as the US exchange rate for that year. If one makes lump-sum contributions (typically to personal RRSPs) one should be tracking the US exchnage rate on those days. This is best done yearly rather than trying to do this 30 years from now.[/quote]
Good info! Thank you. I will make sure we stay up to date with this. I don't want a hassle 30 years from now. I already feel sorry for those American expats who find out years from now that they really should have been filing their US taxes every year.
However, US taxapayers need to do a little more to keep track of contributions for US purposes. The 8891 form itself does not hold all the required information one will need to accurately determine US tax liability of one's RRSP.
One needs to record the yearly amount of periodic contributions (deductible and non-deductible) as well as the US exchange rate for that year. If one makes lump-sum contributions (typically to personal RRSPs) one should be tracking the US exchnage rate on those days. This is best done yearly rather than trying to do this 30 years from now.[/quote]
Good info! Thank you. I will make sure we stay up to date with this. I don't want a hassle 30 years from now. I already feel sorry for those American expats who find out years from now that they really should have been filing their US taxes every year.
One more question. In your first reply on this thread, you said the US tax liability is calculated purely on RRSP contributions. This seems like it could be great for a US citizen with an RRSP who retires in the US. I would think the amount I contribute to an RRSP will be much lower than the total amount of the RRSP at retirement age. Am I understanding this correctly?
I am writing this down and had one more question as to what contributions are deductible and which are not.
When you say the ones made through the employer are deductible, does this include the employer match or not?
Am I understanding correctly that if we make extra contributions through the employer plan, they are deductible? However, if we start a second RRSP somewhere else (unrelated to employer plan), those contributions are not deductible?
Sorry if I'm being dense.
When you say the ones made through the employer are deductible, does this include the employer match or not?
Am I understanding correctly that if we make extra contributions through the employer plan, they are deductible? However, if we start a second RRSP somewhere else (unrelated to employer plan), those contributions are not deductible?
Sorry if I'm being dense.
The only portion of an RRSP which will be able to be withdrawn free of US tax will be the contributions made by the taxpayer which were not deductible on his 1040 and appear as income on the 1040.
So, contributions made by the employee to an work RRSP will be deductible, thus will not be tax-free on withdrawal.
Contributions made by the employer to a work RRSP don't appear as income, so they will not be tax-free upon withdrawal.
Contributions made by the taxpayer to any other RRSP will not be deductible, so WILL be eligible for tax-free withdrawal at some point.
So, in reality, you need to track all contributions made before 2009, and all private RRSP contributions made after Jan 01, 2009. Only these contributions will be eligible for US tax-free withdrawal down the road.
So, contributions made by the employee to an work RRSP will be deductible, thus will not be tax-free on withdrawal.
Contributions made by the employer to a work RRSP don't appear as income, so they will not be tax-free upon withdrawal.
Contributions made by the taxpayer to any other RRSP will not be deductible, so WILL be eligible for tax-free withdrawal at some point.
So, in reality, you need to track all contributions made before 2009, and all private RRSP contributions made after Jan 01, 2009. Only these contributions will be eligible for US tax-free withdrawal down the road.
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
No need to track CONTRIBUTIONS to ana amployer plan after 2008.
This applies reghardless of where you retire. US citizens are taxable wherever they live.
When you retire, your pensions will be your main source of income, and will be reportable in both US, AND in canada.
This applies reghardless of where you retire. US citizens are taxable wherever they live.
When you retire, your pensions will be your main source of income, and will be reportable in both US, AND in canada.
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
[quote="nelsona"]No need to track CONTRIBUTIONS to ana amployer plan after 2008.
This applies reghardless of where you retire. US citizens are taxable wherever they live.
When you retire, your pensions will be your main source of income, and will be reportable in both US, AND in canada.[/quote]
Yes, sorry I meant contributions. Did you mean 2009?
I know we're taxable wherever we live, but I assume that if we stay in Canada, the RRSP will be taxed as it is for Canadians, and we will still be filing our US taxes using foreign tax credits.
I'll regard everything you said--I really don't know whether we will retire in the US, Canada, or Tahiti. :)
This applies reghardless of where you retire. US citizens are taxable wherever they live.
When you retire, your pensions will be your main source of income, and will be reportable in both US, AND in canada.[/quote]
Yes, sorry I meant contributions. Did you mean 2009?
I know we're taxable wherever we live, but I assume that if we stay in Canada, the RRSP will be taxed as it is for Canadians, and we will still be filing our US taxes using foreign tax credits.
I'll regard everything you said--I really don't know whether we will retire in the US, Canada, or Tahiti. :)