Finishing up US taxes. Need a clarification reg. the HBP?

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MIKE2000Z28
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Location: Quebec, Canada

Finishing up US taxes. Need a clarification reg. the HBP?

Post by MIKE2000Z28 »

I have reread certain threads about the reporting of the HBP. However do i add the 20k on line 16a on the 1040? I added the $2400 all 3 rrsp plans made as cumulative gains(they were all fixed GIC accounts)on line 16b. I use the 2555ez form as well. I am just stuck on this part because i thought you only write in the amounts for line 16b and not line 16a. I already filled out a treaty position as well. Thanks! Its pretty urgent as i need to get this registered and out the door since the deadline is June 15th.
nelsona
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Post by nelsona »

take your time, there is only a looming deadline if you owe taxes. December is the deadline for any regulatory statements like 8891.

The trigger for reporting accrued income in your RRSP from an HBP action applies only to the account(s) that you used HBP on.

The total goes on 7a of 8891, the past accrued income goes on 7b. These will automatically go on 16a/16b. Nothing form an RRSP goes directly on 1040, you always use 8891 first.

This is NOT earned income, so cannot be excluded by 2555. you may need to use 1116, as you do for any other non-wage income you have.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
MIKE2000Z28
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Location: Quebec, Canada

Post by MIKE2000Z28 »

So anyway not to pay taxes? I thought i was in the clear. Like i read in one of your other posts, i don't trust to pay anyone to do it properly. Well the 8891 says to put these numbers on 16a/b on your 1040. So i did that and it got added as income. Do i file a 1116 for the rrsp withdrawl seperately?
nelsona
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Post by nelsona »

You are doing this by hand? You should use software, like turbotax. You will not be able to do 1116 by hand.
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Filo
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Post by Filo »

nelsona -- "there is only a looming deadline if you owe taxes" -- Can you clarify that? Even if I file by June 15, if I owe taxes then the late-payment interest still dates from April 15. If I file late (after June 15), then I owe yet more interest, but do I also owe penalties just for having missed June 15?
MIKE2000Z28
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Joined: Wed Jan 16, 2008 11:49 am
Location: Quebec, Canada

Post by MIKE2000Z28 »

I always did it by hand. Which turbotax version do i have to pay for? I hope it has form 1116 for dummies or im screwed. I always used the 2555ez form because i had no other income besides wages. I just took a HBP distribution and the gains are only $2000.
nelsona
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Post by nelsona »

You would owe interst and penalties since April. June means nothing. Most Cdns don't owe IRS taxes, but they do owe various declarations, which all by law are considered timely if filed by december, without any extension being applied for.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
MIKE2000Z28
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Post by MIKE2000Z28 »

So Nelsona, i should ditch the 2555ez form and use the 1116 form for this year and then i can mitigate the tax on the 1500 bucks?
nelsona
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Post by nelsona »

If you only have the 1500 as taxable income, why would you need to file anything more thna 2555. Is your wages more than the exclusion?

gain. software would easilt do this.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
MIKE2000Z28
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Location: Quebec, Canada

Post by MIKE2000Z28 »

around 40k of wages and withdrew around 20k for the home buyers plan. The combined deferred income from the plan is around 1500 or so. Thats the situation.
nelsona
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Post by nelsona »

Any other income? If not, then your RRSP income that you report is far below the taxable threshhold, so there will be no US tax owing.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
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Post by nelsona »

... no income owing even without filing 1116, so you are good to go without it.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
MIKE2000Z28
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Post by MIKE2000Z28 »

So on my 1040. I added the 1500 as taxable in line 16b but it gets added to my income. So is that 1500 excluded as well. I mean the 1040 says it is. What is the taxable threshold by the way?
nelsona
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Post by nelsona »

You can't excliude the $100, but your gross income (after removing your wages with 2555 will be less than your stndard deduction and personal exemption, so you would owe no tax 9assuming that your RRS{P andwage are your only incomes (no interest?, no TFSA? no rent?)
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
MIKE2000Z28
Posts: 62
Joined: Wed Jan 16, 2008 11:49 am
Location: Quebec, Canada

Post by MIKE2000Z28 »

I used to have a TFSA the first year it was out and then closed it because of all the requirements. I only have my wages and this one time HBP withdrawl. So what line do i put the deferred income on? For each of the RRSPs i used, i added up all the line 7bs and got the $1500. Do i just leave those amounts on the 8891 forms and not transfer any of the amounts over to the 1040, right? Its basically a non event?
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