Hey guys, I have a few questions about what to do with my 401k, roth IRA, tax brokerage account.
Background info: 27 year old in NYC, New York, income of 115k pre tax.
Plan: move back to Ontario, Canada in 2-4 years. (Basically going from high tax state to slightly higher tax province). Tax resident of US since 2017 and non-resident status of Canada.
Current Assets
401k: 3k
Roth IRA: 11k
Tax brokerage account: 77k
Projected Assets (2-4 years)
401k: 44k to 92k
Roth IRA: 25k to 40k
Tax brokerage account: 255k to 455k
Plan
Tax brokererage account:
Liquidate all ETFs and stocks in tax brokerage account before I leave to tax advantage of slightly lower LTCG tax. Also to avoid double taxation from both CRA and IRS.
Roth IRA:
Leave untouched until retirement. Currently with Vanguard, will open up with Schwab and Fidelity just in case I have issues with holding a Roth IRA as a non-resident in the future.
401k:
This is where I need some clarification. I plan on converting to IRA after I quit my job (no tax owed), but then plan on converting to ROTH IRA (tax conversion tax) to take advantage of what I think will be slightly lower tax in NYC compared to Ontario.
I'm planning on working for 1-2 months at the beginning of the year I plan to leave to contribute to Roth IRA and to do the conversion as well (that way I'll be taxed for only the tax conversion vs tax conversion + income from wages that year).
Does this sound like a plan that makes sense?
Any other inputs would be highly appreciated. I've also been looking into mega back door Roth so if anyone has any input on that, that'd be appreciated as well.
H1B visa Canadian moving back to Canada, Tax planning
Moderator: Mark T Serbinski CA CPA
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- Joined: Sun Mar 04, 2018 1:59 pm
Correct on all counts.
As long as you move the funds to the Roth BEFORE you become Cdn resident you will (a) only pay US/NY tax on the conversion, and more importantly (b} not "break" your Roth for Cdn tax purposes.
As long as you move the funds to the Roth BEFORE you become Cdn resident you will (a) only pay US/NY tax on the conversion, and more importantly (b} not "break" your Roth for Cdn tax purposes.
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