IRA to RRSP transfer

[Domeani]

Great, thank you so much.

1) When you wrote further up the thread: "...Page 1 of 1040NR, rather than NEC." Did this mean filling out the gross IRA amount withdrawn on line 4a and 4b of the 1040NR? Then calculating tax based on 2023 graduated IRS rates for line 16.

2) Would I have to wait for my 1042-S before I file? If not, I would just fill the total amount withheld in line 25g. It 'seems', and happy to be corrected, this is a super simple 1040NR, if there is no other US source income. The main purpose of getting it in, is to get the transcript for the FTC with the CRA, in case it is asked for. The sooner I can get the 1040NR in, in 2024, the better. I will likely owe more tax (if 1 above is graduated rates) and the 10% early withdrawal penalty, but then everything will be clean/correct and, for me, it will still be tax neutral.

[nelsona]

1, Yes. Don't forget the penalty.
2. No.

[Domeani]

Interesting it seems that Free File Fillable Forms is open but it does not appear to include the 1040-NR - https://www.freefilefillableforms.com/h ... bility.php , although I've not created an account to check. I might create one just to see, even though it looks like a dead end.

I have been looking at TaxAct and it looks like I need the deluxe version for this form to fill about 5 lines, or so. Online cost is $30 and downloadable version for local prep is $140, then e-file. Seems like quite a big difference.

Am I far better off signing up online with TaxAct and e-filing vs. snail mailing the forms to the IRS? I called them today, spoke to a couple of agents, and couldn't get a lot of clear information. It seems from some other threads on this forum that snail mail might be a bad idea, especially if one is looking for faster turnaround, and getting a transcript for the tax credits north of the border.

nelsona wrote:
> You'll have to find a provider that has BOTH 1040NR as an available form,
> AND allows foreign address to e-file.
> Taxact is one that should work.

[Domeani]

Does anyone have insights into:

1) TaxAct online vs. downloadable: is one preferable to the other? why are they priced so differently?

2) The time delay of mailing a 1040-NR to Texas, having it processed, getting a transcript for CRA FTCs versus e-filing (I'm ready to mail or e-file now but would be guessing at the contents of a 1042-S). Is one method (mail vs. e-file) be much preferred over the other? I was wanting to e-file last year when I was looking at this topic, especially seeing delays in years past mentioned in this forum. I wrongly assumed it would a be a simple free file fillable form via the IRS.

Thanks

[nelsona]

It is always better to e-file.

[Domeani]

Thanks for the feedback on e-file, that is my hunch too - a) after reading other posts on this forum on delays and b) haven't mailed tax forms for at least a decade+.

Does anyone have thoughts on TaxAct? Especially the difference between downloadable software and the online version. Preference would be to use the downloadable version but the price difference is big enough I may just do it online. It is really just a 'one off' for me. I ideally will have no more future filings with the IRS, at least while alive! Seems TaxAct would keep the return for 7 years and there is no easy way to delete the account once created (hence my preference to just have the downloadable software and e-file from it).

[Domeani]

Oh, and as a point of reference for anyone else - I did create an FFFF account and can confirm there is no 1040-NR form there (as expected).

[Domeani]

I've created the TaxAct account. But I'm guessing I have to wait for the 1042-S to arrive as there are a number of items I 'can't' figure out:
1. I don't have the UFI (Unique Form Identifier) - is this required?
2. Income code (I think in this case it is 15)
3. I'm not sure about chapter indicator, exemption code, and tax rate for either chapter 3 or 4 (won't it depend what the slip provider gives me?)
(these are all items I have to enter on the 1042-S on TaxAct)

I 'can' figure out:
1. 2 Gross Income
2. 7a Federal Tax withheld
(these two drive everything else - and the whole reason I'm filing this return)

I filled out best I could 1042-S but TaxAct doesn't use the income from this form - https://www.taxact.com/support/22362/20 ... turns-only . I entered a 1099-R, even though I don't think I'll receive one. That does create the income and tax owed is exactly the same as I had calculated in a spreadsheet.

If I don't have a 1099-R how do I create income? I'll ask TaxAct but too bad it doesn't not populate from the 1042-S. Almost simpler to print, and mail the pdfs.

[Domeani]

TaxAct suggested in Other Income - Miscellaneous, which works mathematically. Ends up on line 8 of the 1040-NR under 'Additional Income from Schedule 1'. Hopefully that is good enough.

TaxAct describes Miscellaneous as:
"Did you receive other income from miscellaneous sources such as prizes or awards? Yes or No

Miscellaneous income includes the following:

Reemployment Trade Adjustment Assistance Payments
Reimbursements for items deducted in a prior year (home mortgage interest, real estate taxes, medical expenses)
Loss on excess deferral distributions
Certain dividends on insurance policies
Recapture of charitable contribution deductions
Disaster relief payments
Foster care payments and Medicaid waivers
Form(s) 1099-K Personal Items Sold at a Loss
Incorrect Form 1099-K Income
Credit adjustment from regular income"

Doesn't instil confidence but I can enter some manual text there (ie. IRA Distribution). Better than forcing it through a 1099-R, if non exists.

Despite the simplicity of what I'm doing, in hindsight, it might have been beneficially to spend the money on a cross border account.

[nelsona]

Its not miscellaneous income -- it's IRA income. Nothing else. Line 4a/4b on page 1, or line 7 of the NEC Schedule. Plus penalty from 1040 scheduke 2, reported on line 17 of 1040-NR.

If it doesn't put it there, it (or you) are not doing it right.

[Domeani]

Thanks for the info, and all the feedback you've provided on this topic - it is very much appreciated!! I'll see where I get with TaxAct tomorrow. The problem online is I cannot manually edit the 1040-NR. It gets auto-populated by questions I answer. I can get 4b (but not 4a) filled out by adding the gross distribution to a 1099-R, but I don't think I'll be receiving one, still waiting on a 1042-S. Not sure what else is happening behind the scenes if I'm filling out info for a non-existent 1099-R.

The early withdrawal penalty appears because I was able to fill out form 5329, however, in Schedule 2 it automatically ticks the box on line 8 that the 5329 won't be attached, but the 10% is there. It carries over to line 23b on the 1040-NR (similarly to how I'd done it by hand), rather than line 17. It's basically the same return I had created, just not putting the income in the correct spot (for now).

[nelsona]

you can probably fill a 1042-s in their system. You want the withholding tax to go on the correct line as well.

It isn't 1099-R income in your case.

[Domeani]

I did fill out the 1042-S in their system. The withholding tax gets used from this form, but the income does not. They explicitly state the latter here https://www.taxact.com/support/22362/20 ... turns-only "Note. Any income entered on Form 1042-S will not transfer anywhere else in the program. It must be manually entered on the applicable form(s) or schedule(s) to be properly reported on your return."

There is no manual entry on the 1040-NR with their online return (I can't just input income an IRA distribution on lines 4a/4b), so I added a 1099-R to create it there. I'll ask them again if there is some other way (last time they steered me to miscellaneous income), otherwise I'll likely just mail in printed forms, which I was hoping to avoid.

[Domeani]

I have not been able to file the 1040-NR yet. I have not have received the 1042-S yet, which is due by March 15. If I understand the advice on the forum from Nov 23, 2023, it is suggested I could file without the 1042-S. However, TaxAct does not appear to want to e-file the 1040-NR without a 'unique form identifier' from the 1042-S and the information I received from IRS on the phone, as well as the information here https://www.irs.gov/instructions/i1040nr, suggests if I had physically sent in this return I would need to physically attach the 1042-S. It would appear I do need to wait for this form, despite in my opinion, having a simple return. Is that accurate to your knowledge? Or can you really file before receiving the 1042-S? At this point I only have a couple of weeks to wait, so I likely will but the hope was to have filed end of January.

[nelsona]

Well, ta act won't let you file without it, and yes, if you do file by paper, you need to attach the 1042-S, because it has the withholding amount.

Where is your 1040-S. Should have received by now.