Does RRSP allowable contribution include 401K contribution ?

fordtaurus · Post by **fordtaurus** » Tue Feb 23, 2010 4:17 pm

First time filing tax in Canada & USA.

Let's say, if I can contribute $10000 RRSP for 2009 based on 2008's return and I contributed $5000 401K last year, could I still contribute $10000 RRSP or $5000 only?

Thanks a lot.

nelsona · Post by **nelsona** » Tue Feb 23, 2010 4:27 pm

This applies only to commuters: those living in canada and working in US.

You can still contribute $10,000 to your RRSP. However your deduction will be limited to $10,000. You will, in effect, be eliminating the deduction for your 401(k).

Your 401(k) contributions, whether you use them as a deduction or not, will impact your contribution limit in future years.

In US of course, none of your RRSP contributions are deductible, unless made thru your employer.

nelsona · Post by **nelsona** » Tue Feb 23, 2010 4:28 pm

If you are non-resident of canada and not reporting US income, your 401(k) contributions are not deductible on your Cdn return in any case.

fordtaurus · Post by **fordtaurus** » Wed Feb 24, 2010 1:02 am

[quote="nelsona"]If you are non-resident of canada and not reporting US income, your 401(k) contributions are not deductible on your Cdn return in any case.[/quote]

Thanks. It's gonna be the first year, I guess I will have to file as a commuter because my wife stayed longer in Canada.

Thanks again. I probably will ask more questions when I start to fill the forms.

:D

nelsona · Post by **nelsona** » Wed Feb 24, 2010 7:30 am

Not necessarily

fordtaurus · Post by **fordtaurus** » Wed Feb 24, 2010 5:45 pm

[quote="nelsona"]Not necessarily[/quote]

So what do you mean by "not necessarily"? I left Canada in March, my wife and kid left in July. Do you mean I can file as non-resident while my wife file as a resident/commuter?

Thanks

nelsona · Post by **nelsona** » Wed Feb 24, 2010 5:48 pm

If you did not spend weekends in Canada, it is pretty well established that your US residency started when you moved to US and started working.

If that was the case, you were not commuting, you were residing in US and meet the treaty definition of US resident.

You and your wife can inded have different departure dates.

fordtaurus · Post by **fordtaurus** » Tue Mar 02, 2010 1:16 pm

[quote="nelsona"]If you did not spend weekends in Canada, it is pretty well established that your US residency started when you moved to US and started working.

If that was the case, you were not commuting, you were residing in US and meet the treaty definition of US resident.

You and your wife can inded have different departure dates.[/quote]

Thanks Nelsona.

GTAresident · Post by **GTAresident** » Thu Mar 04, 2010 12:28 am

Nelsona,
Could you please elaborate on how above will affect tax situation. I have similar case. I started working from beginning of year. My family stayed till May and therefore I considered myself as commutor even though I visited only once during these 5 months.

Does it mean that I pay tax to Canada for world income till May? That is how I plan to do my taxes. Any other tax saving tips will be appreciated.

Thanks