Retired dual citizen, Canadian resident - tax forms to file. Am I missing any?

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Gilgamesh
Posts: 72
Joined: Tue Apr 02, 2019 5:30 pm

Retired dual citizen, Canadian resident - tax forms to file. Am I missing any?

Post by Gilgamesh » Fri Apr 12, 2019 2:21 pm

Sources of income SS, CPP, OAS, Roth IRA (Immediately report via CRV technical #43) possibly some tIRA, HSA, bank interest in both countries for my wife and I. Homes in both countries but not rented.

- For CRS
1. File T1
85% of SS and CPP goes together.
Roth IRA is reported in lime 115 and taken credit on line 256.
I will ask IRS to withhold 15% of tIRA withdrawals for the first year and adjust (?), this will go on line 115 as it is a foreign pension and of course not deducted on line 256.
Qualified HSA does not need to be reported.
Unsure about interest payments from Canadian and USA banks.
2. File T1135
Only HSA needs to be reported.
Home in USA doesn’t have to be reported as personal use. Could rent for less than 50% of the days and still qualify for ‘personal use’
Unsure about USA bank account earning interest


- For IRS
1. File 1040 - SS,CPP,OAS will go as SS but taxable amount will be zero.
2. File 8889 for HSA (Canadian medical/dental expenses even as a Canadian resident are qualified expenses)
3. File FinCEN form 114 (FBAR) for Canadian account as it will exceed $10k. Only report Canadian bank account here?
4. Form 8938 - only if the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year. I think this includes Canadian bank balance. Does not include Canadian home.
5. Form 1116 - Take tax credit for tIRA distributions paid to Canada? Do I pay tax for bank interest (USA/Canada) to Canada? If so I guess it’ll go here

Gilgamesh
Posts: 72
Joined: Tue Apr 02, 2019 5:30 pm

Re: Retired dual citizen, Canadian resident - tax forms to file. Am I missing any?

Post by Gilgamesh » Fri Apr 12, 2019 2:24 pm

Question1) Is there a line in 1040 to claim 1116 credit?

Question 2) How to deal with Canadian and USA bank interest with CRA?

Question 3) Am I missing any forms in my post and nay mistakes with what I Wrote?

Thank you!

Gilgamesh
Posts: 72
Joined: Tue Apr 02, 2019 5:30 pm

Re: Retired dual citizen, Canadian resident - tax forms to file. Am I missing any?

Post by Gilgamesh » Fri Apr 12, 2019 2:57 pm

Sorry! Question 1 was posted prematurely...answer - Attach schedule 3 and take deduction on line 12 of 1040.

Gilgamesh
Posts: 72
Joined: Tue Apr 02, 2019 5:30 pm

Re: Retired dual citizen, Canadian resident - tax forms to file. Am I missing any?

Post by Gilgamesh » Fri Apr 12, 2019 5:05 pm

Question 2: It looks like I will pay Canadian taxes for interest earned in Canada and USA, and will get no credit for USA taxes paid (I guess as a Canadian resident USA bank will have some withholding even for USA citizens?) on USA interest. I will get credit for Canadian taxes pad on Canadian interest and show in form 1116.

Looks like I will be dual taxed on USA interest income as a Canadian resident...is this correct? Or will USA give credit even for Canada taxing USA interest income and refund the withholding?

Gilgamesh
Posts: 72
Joined: Tue Apr 02, 2019 5:30 pm

Re: Retired dual citizen, Canadian resident - tax forms to file. Am I missing any?

Post by Gilgamesh » Sat Apr 13, 2019 6:26 pm

It looks like 85% does not go along with CPP.

100% of SS is reported in line 115 and then 15% deduction is taken on line 256

https://www.canada.ca/en/revenue-agency ... urity.html

Gilgamesh
Posts: 72
Joined: Tue Apr 02, 2019 5:30 pm

Re: Retired dual citizen, Canadian resident - tax forms to file. Am I missing any?

Post by Gilgamesh » Sun Apr 14, 2019 12:59 pm

On page 56 now, and got the answer for dealing with interest earned in USA bank account as a Canadian resident

“US Bank interest is not taxable for US non-residents. Period.”

Gilgamesh
Posts: 72
Joined: Tue Apr 02, 2019 5:30 pm

Re: Retired dual citizen, Canadian resident - tax forms to file. Am I missing any?

Post by Gilgamesh » Sun Apr 14, 2019 7:57 pm

Only question remaining is...given the situation, are the mentioned forms the only ones needed. I assume I don’t file 8938 if Canadian bank balance stays under $100k @ end and below $150k at any time.

So, for CRA file T1, & T1135. For IRS file 1040, 8889, FBAR (account will have more than $10k), 8938 (if needed) and 1116

Gilgamesh
Posts: 72
Joined: Tue Apr 02, 2019 5:30 pm

Re: Retired dual citizen, Canadian resident - tax forms to file. Am I missing any?

Post by Gilgamesh » Tue Apr 16, 2019 1:38 pm

If anyone else wondering this IRS page has lots of info
https://www.irs.gov/individuals/interna ... alAccounts

nelsona
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Re: Retired dual citizen, Canadian resident - tax forms to file. Am I missing any?

Post by nelsona » Tue Apr 16, 2019 1:55 pm

Just so we are clear, those eligible to file 1040NR do not report US bank interst on their return. US citizens of course do have to report all interest on 1040. The diffiernce is that Canada will not give a tax credit for the US tax on US-sourced bank interest, so that portion of your reported interest will have to be claimed on a "re-sourced" 1116, which will in effect reduce the US tax you pay on the US interest to 0. Cdn bank interest will go on a regular passive 1116, and the Cdn tax you paid will be credited on that to reduce your US tax.
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.

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