Withdrawals from IRA and Roth IRA account

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Mikefa9164
Posts: 11
Joined: Mon Aug 13, 2018 7:51 am

Withdrawals from IRA and Roth IRA account

Post by Mikefa9164 »

I retired at the end of last year and moved to Canada. I converted all my 401K into IRA and my 401K Roth to Roth IRA.
I have with drawn some amount from my IRA as Well as Roth IRA account.
I plan to With draw more this year, but keep it below 20K from IRA.

My question:

1. Will I have to file taxes in USA in 1040 NR for IRA withdrawals? 20K is below standard deduction, so Will I have to pay any taxes to USA?
2. Will I need to show this as income in Canada? Will I be taxed in Canada for this?
3. Will my Roth IRA withdrawal need to be declared in Canada and will it be taxed? Roth IRA is not taxed in USA.

Thanks for your response.
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Withdrawals from IRA and Roth IRA account

Post by nelsona »

1. 1040NR does not have standard deduction. You pay flat tax on those withdrawals. So unless the income is correctly withheld, you will need to file tp either pay more or get refund.


2. Yes, the IRA is fully taxable in canada. Theroth is taxable only to the extent that it is in US. Any tax and penalty you inciur in US can be used in canada as a credit.
You may have ended up with a couple of unintentional results in transferring your accounts out of your employer plan, I point these out for the benefit of others:
1. Your Roth account has to be in existence for 5 years regardless of your age to avoid tax and penalties. If this is a new account, you will need to go through the calculations to determone what portion, if any os taxable growth. If this us a new account, I would suggest waiting the 5 years before taking the money.
2. In Canada neither of those accounts are "splittable" with your spouse. Your original accounts would have been.

3, You have to file a statement the firtst year you are in Canada regarding your Roth, and then make no futher contributions after arriving in Canada. Then it will be taxed as it is in US, depending on what I said in #2.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
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