I am a Canadian Citizen living in the US for approx 15 yrs on a Green Card. I will have US Citizenship in the next couple of months. I am self employed (make minimal $) and will be closing up my small home business to work full-time in Canada (job is pending). My husband is a US Citizen and I will be applying for landed immigrant status for him shortly. I have an IRA that I do not put anything into - it's just sitting there in mutual funds - less than $30,000. I am 53 yrs young. My husband is 64 and has a full-time job that he will be leaving. He has an IRA as well (close to $80,000). We own a home together which we will sell and plan to rent in Canada. We will probably not make anything from the sale of the home. We live in a state with no state income tax. If this job comes to pass we plan on moving in approx. 6+ mos. I've been reading some of the Dual Citizen posts and your responses about tax implications on going back to Canada but seems everyone's situation is a little different. Can you possibly supply some advise for our situation. i.e. I notice you tell everyone to roll there IRA into a Roth. How does this affect me and how would this affect my husband. Oh I forgot if my husband collects social security while living in Canada as a landed immigrant, how is he taxed before age 65 and after age 65 (I think there may be a difference?).
Thank you!
Another Dual Cit (almost) w/ US Spouse moving to Canada
Moderator: Mark T Serbinski CA CPA
On your IRAs:
Your choices are
1) Do nothing. They will be taxable in US and canada when you start withdrawing from them, with the result being the Cdn tax rate
2) collapse them now. You would have to pay a 10% penalty. Hubby would not. The entire ammount woudl be taxable.
3) Roll them into Roth BEFORE moving. The entire amount would be taxable, but no penalty for you. The money then becomes tax-free forever.
Given your age, I would probably just hold on to them, and start taking them as pension when either/both of you are not working. If you were both young (>50) I would advise rollover to Roth.
The one thing I would not do is have you collapse yours because of the penalty.
Social security paid to Cdn residents (immg status and age does not matter) is taxed ONLY in canada, at the 85% inclusion rate like in US.
Your choices are
1) Do nothing. They will be taxable in US and canada when you start withdrawing from them, with the result being the Cdn tax rate
2) collapse them now. You would have to pay a 10% penalty. Hubby would not. The entire ammount woudl be taxable.
3) Roll them into Roth BEFORE moving. The entire amount would be taxable, but no penalty for you. The money then becomes tax-free forever.
Given your age, I would probably just hold on to them, and start taking them as pension when either/both of you are not working. If you were both young (>50) I would advise rollover to Roth.
The one thing I would not do is have you collapse yours because of the penalty.
Social security paid to Cdn residents (immg status and age does not matter) is taxed ONLY in canada, at the 85% inclusion rate like in US.
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