Keeping $ 100,000 in Canadian savings account while leaving in US

[Vox 0]

I live in US but I have left some of my savings in Canada in $ CA. There is more than 100K in Canadian savings account. US $ is not very sought currency nowadays.

Will I have any issues with Revenue Canada because of this?

I do not want to pay double tax.

Any help is welcomed!

Thanks!

[Udella&Wiz 325]

I live in US but I have left some of my savings in Canada in $ CA. There is more than 100K in Canadian savings account. US $ is not very sought currency nowadays.

Will I have any issues with Revenue Canada because of this?

I do not want to pay double tax.

Any help is welcomed!

Thanks!

You may be best to ask your question here in thios tax forum - recommended by Flames originally, the guy who answers questions is a little crusty, but well informed. Try searching first and you may find your answer before asking.

[Kathryn41 3,205]

You probably won't have any concerns with Revenue Canada as the money in your savings account isn't taxable as income although you will need to declare the interest each year. You will also have to report the existence of the money to the IRS even though it is in a foreign bank account. You won't be taxed on the principle but the interest is again taxable, although you would be able to avoid double taxation by claiming a foreign tax credit on the interest. (Canada and the US have a tax treaty to prevent most double taxation situations). There is a special form you also need to file to declare the foreign money and then the interest would be included in your annual US tax return (you would need to do your Canadian return first for the interest to have the amount available to use in preparing your US return). The information should be listed in the tax thread. The penalty for failure to declare the existence of this money to the IRS can be high so you will want to make sure you do file the form.

Edited November 17, 2011 by Kathryn41

[Vox 0]

Thanks!

What tax forum do you mean?

[Kathryn41 3,205]

Thanks!

What tax forum do you mean?

I believe this is the correct one: http://www.irs.gov/p...-pdf/f90221.pdf Hopefully someone will correct me if I'm wrong.

Here is some more information about it: http://www.irs.gov/businesses/small/article/0,,id=210244,00.html

Edited November 17, 2011 by Kathryn41

[Piefre 15]

Do you have to submit this form as soon as you land in the US? Or can it wait until you adjust status? Just not sure what the timeline to declare foreign bank accounts is. And do you have to declare foreign bank accounts for Canada too?

Edited November 17, 2011 by Piefre

[Udella&Wiz 325]

Sorry - I forgot to include the link. Kathryn summed it up nicely, but this forum can be help when doing taxes

http://forums.serbinski.com/viewforum.php?f=2

[SapphireDreams 71]

Do you have to submit this form as soon as you land in the US? Or can it wait until you adjust status? Just not sure what the timeline to declare foreign bank accounts is. And do you have to declare foreign bank accounts for Canada too?

You would only declare it if you're bringing it with you. You have to declare anything over $10,000. If it's staying in Canada, you would just include the interest on your taxes.

[Gypsyangel 11]

Do you have to submit this form as soon as you land in the US? Or can it wait until you adjust status? Just not sure what the timeline to declare foreign bank accounts is. And do you have to declare foreign bank accounts for Canada too?

You file the form when you do your taxes. I can't remember the name of the form, but you have to list every account in your name in Canada (bank, investment, RRSP), incuding the name of the institution, the account number, the balance. It's not due until I think June of every year, but it's easier to do it when you file your taxes in April. If you buy tax software, the form will be included. Or you could probably search for it in the IRS website.

[pocheros 101]

You file the form when you do your taxes. I can't remember the name of the form, but you have to list every account in your name in Canada (bank, investment, RRSP), incuding the name of the institution, the account number, the balance. It's not due until I think June of every year, but it's easier to do it when you file your taxes in April. If you buy tax software, the form will be included. Or you could probably search for it in the IRS website.

I have a little question... Does this go for everyone who has a Canadian bank account even if there's only $10 sitting in it?

[SapphireDreams 71]

I have a little question... Does this go for everyone who has a Canadian bank account even if there's only $10 sitting in it?

I'd be intersted to know. I didn't do this last year and I had a few thousand sitting in an account. I don't keep money in Canada anymore, but have an account that I transfer money to pay student loans with.

In my opinion, it doesn't seem like it matters all that much. The IRS has bigger fish to fry.

[Flames9_RN 358]

I know in the USA if ur interest earned in a savings acct is less than $10 you do not have to report it! In my Cdn bank acct, I keep less than $1 in it, so no $$$ is made from that,lol

When 1 brings over more than $10,000, u just have to report it---ur not going to get taxed on it.

To report any Cdn RRSP, you have to use form 8891. As well you have to notify the Cdn institution that is handling them. They sent me a form to fill out, cant recall the name of it.

[Gypsyangel 11]

The way I do it is ... if the Canadian institution sends me a T5 (Is it a T5?) that says how much interest I made on an account, then I report it. If they don't think it's enough to bother sending me the T5, then I don't report it. Not sure if that's correct, but that's how i've done it. I've only been reporting it as U.S. income ... not sure if that's correct either. In any case, it's not enough $$ for Canada to come after me.

[Kathryn41 3,205]

You only need to file the form if you have over $10,000 in foreign assets or a bank account at any time during a year in which you are also resident in the US. The form is sent to the Treasury Department and isn't actually filed with your income tax return but you can prepare it at the same time. The filing deadline is the following June of the year in which you had more than $10,000 in a foreign bank or some sort of foreign account such as investments.

I will have to file this form myself either this coming June or the following June depending on if my Dad's will is probated before December 31 or after December 31 since my brother and I are co-executors and co-heirs of his estate and it will end up being more than $10,000. So, I'm reading up on the process myself. I think you will find the links I listed earlier helpful. You could also check out some of the other information contained on the site - it may answer some of your other questions in more detail.

Edited November 18, 2011 by Kathryn41

[Vox 0]

Thank you everybody for the great info.

I have a little problem, I did not report it last year and I had more 10K in my checking account.

Any idea what to do?

What kind of fine are we talking about?

I will also post it on the accounting forum.