This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.
A Canadian resident with US wages files a 1040 under Article XXV(1) of the Treaty declaring world income. Since they report world income, do RRSP earnings need to be reported or would they file form 8891 deferring the income? What about FBAR requirements?
Let's assume that the following year, the Canadian resident decides, for whatever reason, to file a normal 1040NR. What happens to the RRSP earnings and FBAR requirments at this point?
The rule of thumb is any year you file a 1040 (either by choice or required), you need to file 8891 and FBAR.
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
On the 8891, do we make the election to defer tax on the income or do we just include the income on the 1040? What if there is a distribution in the year?
You should take the election to defer. Why pay tax that you should not until you have to, when you will also have Cdn tax to use as a credit.
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