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.
I know from reading this forum that Canada now allows FTC for the 10% penalty tax when a resident withdraws funds early from an IRA. I am playing around with Ufile trying to figure out how much I would need to withdraw to get my average Cdn tax rate up to 25% and use the full US withholding (15% treaty rate + 10% penalty rate). But this is not so simple!
My problem is the mechanics of claiming that extra 10% tax. Ufile caps the FTC at normal 15% treaty rate on form 2209. Is there some other place on the return where the extra 10% credit gets entered or do I need to find a way to override this 15% limit imposed by the software to force it onto form 2209? (It seems a shame to do these calculations manually!)
Does anybody know about the free software makers such as StudioTax or TaxFreeway? (Hey, if I am going to switch next year, maybe I can save a few bucks!)