Group RRSP, Personal RRSP, and form 8891

jps · Post by **jps** » Thu May 24, 2012 3:01 pm

US Citizen, CDN Citizen/Resident. Company has RRSP with Great West Life and I also have a personal RRSP. Former has automatic pay-roll deduction, and latter is a manual contribution I make myself annually.

Questions:
Am I required to report the contributions "I" make to both of these on form 8891 each year?

I presume that only the company group RRSP contributions can be deducted from my 1040 in my Adjusted Gross Income? Or can these also be included as deuctions on form 1116?

Thanks,
J

nelsona · Post by **nelsona** » Thu May 24, 2012 3:13 pm

If you follow the form 8891 instruction carefully, you NEVER have to report your contributions UNLESS you never make the election to defer.

If you have elected to defer taxation, then you ALWAYS stop at line 8. Contributions come on line 9.

So only those who choose to report their internal earnings every year need to also report their contributions.

The differnce between the 2 RRSPs however comes in whther or not you can claim them as a deduction from your gross wages: only the group RRSP that YOU make can be claimed, upto the current 401(k) limit.

nelsona · Post by **nelsona** » Thu May 24, 2012 3:13 pm

You would of course have TWO 8891 forms, one per account.

jps · Post by **jps** » Thu May 24, 2012 4:43 pm

I am not following the "defer" taxation part. So I still have to file the form for [u]each [/u]RRSP for [u]each [/u]year. Why would I want to defer them from taxation? Or is that more referring to when I retire? Assuming I move back the US in the near future...

nelsona · Post by **nelsona** » Thu May 24, 2012 5:04 pm

The purpose of 8891 is to report the existence of the RRSP AND to decide whether you want to defer taxation on them until you start withdrawing the money.

So, if you choose not to defer, then you must report and pay tax on the internal income generated on your RRSP every year.

Why would you NOT defer taxation? Otherwise you need to add the internal income to your taxes right now. Have you figured out how much that income is?

Have you read the 8891 form and its instructions?

jps · Post by **jps** » Thu May 24, 2012 5:24 pm

I am reading through it now. If the RRSP took a loss (i.e. book value greater then market) then do I still report? I would only report the gain then to be deferred? Or the over all value. Anyway I will finish reading though it before posting back. I am now a little worried about previousl years as I do not recall doing this.

jps · Post by **jps** » Thu May 24, 2012 7:15 pm

OK so I think I am clear here. I entered a value on line 8 for the plan balance and had nothing for 7ab. I only have 6a since this is the first year that I am filing this but I now ask whether I should back file for other years. Anyways, thanks for the clarification and assistance.

jps · Post by **jps** » Thu May 24, 2012 7:18 pm

forgot to complete last post. 6c states that if it is the first year, then you can make an irrevocable election for this years and subsequent years.

nelsona · Post by **nelsona** » Thu May 24, 2012 8:50 pm

If you haven't filed 8891 in the past, you should first back-file ALL years that you ahd an RRSP and make the election in the first year for each RRSP.

Otherwise you owe back taxes and penaties for fialing to report your RRSP to IRS.

You also have FBAR requirements (no questions -- learn first please) for all years.

jps · Post by **jps** » Fri May 25, 2012 2:06 pm

FBAR?

nelsona · Post by **nelsona** » Fri May 25, 2012 2:41 pm

not here to spoon feed, sorry.

jps · Post by **jps** » Fri May 25, 2012 2:45 pm

Oh ok you mean Form TD F 90-22.1. I already do those. Sorry I'm not a tax professional so I do not know all the esoteric IRS acronyms. Thanks again for your assistance.