CDN living and working in the US on a TN

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CDN living and working in the US on a TN

Post by jakep »


I've been living and working in the US (for a US company) on a TN visa for about 5 years. This has been my first job out of college and I do not hold any assets in Canada. The closest thing to a permanent residence in Canada is my parent's house.

All along I have been paying taxes only in the US as my employer is a US employer and I am paid in USD.

My company was just bought out by another company and we are now offered a 401(k) program with matching. Is it a good idea for me to invest in the 401(k)?

Also, is my tax situation ok or I am completely messing up?

Ideally I would like to get into IRAs and Tradtional Investment accounts for trading stocks and buying into Mutual Funds. What do I do?
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Post by worryfreeinvestor »

Do you mean that you have been getting a new TN1 visa every year with the same company? Can you not have them get you an H1B? I ask because I do not think you are making much progress towards a green card if you just get a new TN1 annually, especially because the border guard can turn you down on a whim each year you do so.

As to your question, I don't think your immigration status has anything to do with whether your company's 401(k) is a good investment or not. As a general rule, I'd say any opportunity to shelter income and earnings is good. I just came down on a TN1 in May 2005 and am fully invested in one (actually, it's a 403(b) because I work for a non-profit).
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Post by Mark T Serbinski CA CPA »

Investing in a 401(k) is a good thing, especially if you are considered a non resident of Canada (which it sounds like you are). If you were a resident of Canada, then the pension contributions would be added to your Canadian income.

I think that a 401(k) is good for the following reasons:

1. You defer tax on the contributions, until retirement;
2. Your employer match is really additional deferred compensation; and
3. You get to diversify your pension portfolio - US and Canada.

Just remember that U.S. pensions normally incur a 10% withdrawal penalty (plus the tax) if you withdraw the funds prior to age 50 1/2. You should plan to keep your pension funds invested until retirement.
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Post by nelsona »

Mark typo's 50 1/2 ; he meant 59 1/2
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
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