US taxes on Canadian RRSP Withdrawals

[pl0910001]

I understand that RRSP withdrawals will be subject to Canadian witholding tax, could be as low as 15% if it's a systematic withdrawal from an RRIF. For the purposes of simplicity, let's say the the RRSP or RRIF value is 100k when i move to the united states. This 100k will then not be taxable in USA, but i will pay a witholding tax to canada when i withdraw. As this amount is not taxable in the states, am i still able to claim the foreign tax credit for the amount of witholding tax on my us tax return assuming i have other income in the states that i did pay tax against?

[nelsona]

No. You need to have foreign income that is taxable in US. In this case it would be best to take the 25K of tax as a deduction.

[pl0910001]

Thanks for the reply Nelsona. Not quite following what you mean by taking the 25k of tax as a deduction. Deduction against what income exactly?

[pl0910001]

Did some research and understand that if itimizing, i can claim the tax paid.
The foreign tax deduction is one of the itemized deductions that may be taken by American taxpayers to account for taxes already paid to a foreign government, and are typically classified as withholding tax.

Given this, what are the best strategies to withdraw from my rrsp and 401k/IRA which would minimize total taxes paid each year?

[nelsona]

Leaving it until you stop working.

[pl0910001]

Following up on this thread. As this 100K is not taxable in the united states, will this not could toward MAGI. Asking the question because in early retirement, will try to keep MAGI low in order to get ACA health insurance rebates.

[pl0910001]

Following up on this thread. As this 100K is not taxable in the united states, will this not could toward MAGI? Asking the question because in early retirement, will try to keep MAGI low in order to get ACA health insurance rebates.

[nelsona]

No, it should not count towards your MAGI.

[pl0910001]

Thanks Nelsona,
is there another thread or some info that outlines how to proceed with RRSP withdrawals and filing of US tax returns? Do I simply keep my own records and only claim only the taxable amount on the return, or does it all need to be entered, and then is deducted against elsewhere. Apologies if this thread is neverending.