Serbinski Accounting Firms

eortlund · Post by **eortlund** » Mon Dec 29, 2008 11:27 am

It's a book called The American in Canada. Maybe you've heard of it? I think it's written by people who do similar work to what you do at your firm.

So do you think it's a good idea for me as an American in Canada to start RESPs for my kids? How big would it have to grow before I'm at risk of the IRS taxing it?

eortlund · Post by **eortlund** » Mon Dec 29, 2008 11:28 am

OK, this has happened to me twice, where I try to reply to a post and it starts a whole new post.

nelsona · Post by **nelsona** » Mon Dec 29, 2008 12:25 pm

maybe its because you are putting a new subject line. Don't do that.

I don't work for serbinski.

Wruk is wrong on this issue. There are several errors in those 3 books they have published. Several errors is not bad, except when it throws you off-course, of course.

nelsona · Post by **nelsona** » Mon Dec 29, 2008 12:30 pm

To your question:

I've never been that big a fan of RESPs, so, given the complications of US citizenship, I would have to say pass.

If you have Cdn parents, it would be better for them to set up the RESP for your kids.

They will be taxableon your 1040 from day one.

eortlund · Post by **eortlund** » Mon Dec 29, 2008 2:30 pm

[quote="nelsona"]To your question:

I've never been that big a fan of RESPs, so, given the complications of US citizenship, I would have to say pass.

If you have Cdn parents, it would be better for them to set up the RESP for your kids.

They will be taxableon your 1040 from day one.[/quote]

Oh, I thought you were one of the website owners--sorry for the mistake. You said there were other errors in the book I mentioned--can you say what they are? Expat finances are confusing enough without books being misleading.

Can you say why you are not a fan of RESPs? No, we are both Americans and all of our family members are as well, so no one can set them up for us. I wonder if it would make sense though to have our American parents do that for us with a US investment?

OK, when you say they would be taxable on our 1040. As it is now, given our income not being terribly high, and the foreign tax credits, we never owe the IRS money. So I'm assuming as long as RESP earnings were relatively low, that would stay the same?

nelsona · Post by **nelsona** » Mon Dec 29, 2008 2:47 pm

Obviously I would have to read the whole book to list his errors.

You have found one. There are others.

Robert Keats' Border Guide is a MUCH better book than Wruk's.

RESPs don't give a tax deduction and have very strict distribution rules. Many RESP 'plans' do not pay of very well 9more like insurance). Only the Grant money makes them palatable.

529 plans in US are available for you or your folks. They could look into this. again, lots of strings for cross-border. Better they just give the money to you or your kids.

But, really, in my opinion, a solid, tax-managed portfolio held by you will outperform any RESP, with no strings. Even putting the money towards your house now will free up lots of income to give the kids to go to school. Your principal residence is the one investment that grows tax-free in both US and canada.

nelsona · Post by **nelsona** » Mon Dec 29, 2008 2:52 pm

You should be getting 1000/yr back from IRS for each child you have. Are you? if not then you are paying taxes to IRS.

eortlund · Post by **eortlund** » Mon Dec 29, 2008 9:57 pm

Thank you for the opinion on RESPs. I think I'll forget about it for now. We need to get our own retirement plan in order first. I will check out that other book you mentioned.

Yes, we file our US taxes using a foreign tax credit and receive $1000 per child.

nelsona · Post by **nelsona** » Tue Dec 30, 2008 9:24 am

Good.

As I often say, there are student loans, but not retirement loans.

Your retirement is your responsibility.