10 % withdrawl penalty for US citizen on Canadian pension?

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elvis1
Posts: 7
Joined: Wed Mar 21, 2012 4:13 pm

10 % withdrawl penalty for US citizen on Canadian pension?

Post by elvis1 »

Hi, I took out a pension from a defunct Canadian company I worked for last year. I took the whole lump sum. I brought my taxes to an accountant here in Texas and got my returns. I see I was charged 10% on form 5329. I thought this not being a US account, I did not have to pay that 10 % early withdrawl. I already paid the Canadian taxes and declared this as income on my US return.
Thanks.
nelsona
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Post by nelsona »

Absolutely NO penalty on this amount.
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
elvis1
Posts: 7
Joined: Wed Mar 21, 2012 4:13 pm

Post by elvis1 »

How do I go about this now? He e-filed it and it is in the system. He used form 5329 and I was dinged the 10% on it.
nelsona
Posts: 18686
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

You'll need to amend your return, 1040-X. Tell your CPA to get his head out of his ass, put 1040 line 58 to ZERO, and explain on the 1004-X that this was NOT a quealified plan, since it was a foreign pension, and that he is an idot, and will never prepare a fake a 1099-R for a foreign pension.
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
nelsona
Posts: 18686
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

While you are at it, make sure that your foreign tax credit (form 1116) was handled properly, too.
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
elvis1
Posts: 7
Joined: Wed Mar 21, 2012 4:13 pm

Post by elvis1 »

Thanks. I'm going to talk to him Monday. I don't see a form 1116 for tax credit either! Man what a mess.
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