Hi,
I am a Canadian citizen currently living/working in the US. Currently have a green card and should have US citizenship in a few months.
I may wish to return to Canada in the next few years upon retirement. My understanding is that if I leave my 401k, IRA's in the US then when drawing funds after retirement I will be subject to a 15% US withholding at source.
My question is this: what if my income while retired is not high enough to even reach a 15% US tax liability? When I file my US 1040 will I end up with a refund if this is the case?
Thanks
Income tax upon retirement
Moderator: Mark T Serbinski CA CPA
There will be withholding, however as a US citizen you will HAVE to file a 1040 every year, on which you will calculate the exact tax.
The flat withholding tax strictly applies to aliens (which you will never be),
The flat withholding tax strictly applies to aliens (which you will never be),
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
Thank you for the prompt reply. I have a few other questions specific to my situation.
Currently I am living and working in Florida. I'm considering taking a job in western New York state. Then perhaps sometime in the future I may move from New York state back to Ontario. I'll be a dual Canada/US citizen prior to that happening.
1. I know that if I were move from Florida back to Ontario I would only have a US federal tax liability, since Florida has no state income tax. However, if I were to move from New York state back to Ontario, would my New York state income tax liability end at that time? Upon moving back I would no longer be employed by any New York state entity. I may have a bank account or IRA left in New York however.
2. When I sell my primary residence in Florida I will likely already be a New York state resident. The IRS allows me to avoid capital gains up to $250,000, which more than covers me. Would I end up paying any tax to New York state from the capital gain on the sale of the Florida home?
3. IRS form 8891 allows me to elect to defer federal income tax on my Canadian RRSP earnings within the plan. Will New York state also allow me to defer state income tax on the RRSP earnings in the same fashion?
Thanks for any help you can provide.
Currently I am living and working in Florida. I'm considering taking a job in western New York state. Then perhaps sometime in the future I may move from New York state back to Ontario. I'll be a dual Canada/US citizen prior to that happening.
1. I know that if I were move from Florida back to Ontario I would only have a US federal tax liability, since Florida has no state income tax. However, if I were to move from New York state back to Ontario, would my New York state income tax liability end at that time? Upon moving back I would no longer be employed by any New York state entity. I may have a bank account or IRA left in New York however.
2. When I sell my primary residence in Florida I will likely already be a New York state resident. The IRS allows me to avoid capital gains up to $250,000, which more than covers me. Would I end up paying any tax to New York state from the capital gain on the sale of the Florida home?
3. IRS form 8891 allows me to elect to defer federal income tax on my Canadian RRSP earnings within the plan. Will New York state also allow me to defer state income tax on the RRSP earnings in the same fashion?
Thanks for any help you can provide.
1. Your NY tax would end when you leave NY, except for any real estate there.
2. No.
3. The only state which does not allow for RRSP shetering is California. All other states accept the ammounts reported on your 1040.
2. No.
3. The only state which does not allow for RRSP shetering is California. All other states accept the ammounts reported on your 1040.
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