[HI from Florida, I am a US resident and dual citizen and must convert my RRSPs to RRIFs this year (age 71) I understand the withholding rate will be 15% if withdrawals done on a systematic basis Anyone have any experience with this??
Also what forms must be filed to facilitate transfer and lower tax rates with US and/or Canada?
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US RESIDENT TAX ON RRIF WITHDRAWALS
Moderator: Mark T Serbinski CA CPA
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artistic95
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- Joined: Wed Sep 26, 2012 12:27 pm
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US RESIDENT TAX ON RRIF WITHDRAWALS
Thanks, Artistic95
RRIF withdrawls (as long as they are less than the maximum allowed per year) are flat taxed 15% by canada.
You ALSO need to report the gross and taxable amount on your 1040, using form 8891.
The taxable portion is based on the "cost" of your RRIF, which would, if this was an RRSP, the book value at the time you became taxable in US (so you will need this figure). And you need to make sure that you have been reporting the RRSP in the past on form 8891 and on FBAR.
You can then use the foreign tax credit mechanism to reduuce the IRS tax you owe on the RRIF payment.
In casnada, assuming your RRIF is 90% of your world income, you may be able to reduce the tax to an ammount less than 15%, using a 217 election.
You'd need to know what your yearly world and RRIF income are.
You ALSO need to report the gross and taxable amount on your 1040, using form 8891.
The taxable portion is based on the "cost" of your RRIF, which would, if this was an RRSP, the book value at the time you became taxable in US (so you will need this figure). And you need to make sure that you have been reporting the RRSP in the past on form 8891 and on FBAR.
You can then use the foreign tax credit mechanism to reduuce the IRS tax you owe on the RRIF payment.
In casnada, assuming your RRIF is 90% of your world income, you may be able to reduce the tax to an ammount less than 15%, using a 217 election.
You'd need to know what your yearly world and RRIF income are.
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