Pension, rrsp savings, and bank account funds

[Marzena & Stephen 544]

Hello,

I am wondering if anyone knows if you have to disclose how much rrsps or pension you have (in canada)  to the usa irs or consulate.. when you move? 

 

I read somewhere that they use to make you file a form with this info because these accounts grow? But from my understanding the funds earned are not taxable between canada and usa ..however i wasnt sure if there was still a process in place to disclose these amounts?   

 

Also do you have to mention anything about canadian savings accounts?

I do understand tax free savings accounts are no longer tax free when you are not a resident so i moved those funds to rrsps..and i cleared my "savings" to chequeing so that i wouldnt earn interest as it could get annoying filing taxes on those amounts but i wasnt sure about what we need yo disclose (not trying to hide anything, i just dont want to miss a form if required) thank you!

[lilacmarie213 4]

This isn't something the consulate needs, but it is something that you will need to report in your US/IRS taxes every year.

• FBAR dictates that anything over $10,000 aggregate in foreign accounts must be disclosed and filed yearly. This is a pretty straightforward form that is submitted online as FinCen Form 114. Even if you are not earning interest, etc., you must report.
• You may need to file IRS Form 8938 if the aggregate value of foreign accounts exceeds $50,000.
• All interest/dividends/etc. income from foreign accounts should be included on your IRS 1040.
• All foreign income must be reported on the Schedule B IRS form (even if you did NOT receive $1,500 or above).

Other reporting requirements are based on when you take distributions from the RRSP/Pension plans.

• I believe pension income is supposed to be filed as if they were received by the SSA (so basically you'd pretend you received SSA-1099 form, see https://www.irs.gov/pub/irs-pdf/p915.pdf page 6) due to the tax treaty between the US/Canada. It would be reported on the IRS 1040 form as if it was received as an SSA benefit. 
• RRSP/RRIF distributions are also reported on the 1040 Form, on line 16a and 16b (https://www.irs.gov/pub/irs-drop/n-03-75.pdf).
• You may also need to file Form 1116 (Foreign Tax Credit), if you paid any foreign taxes that year to prevent double taxation.

TFSA/RESPs should be closed the year prior to moving to the US, as they are often considered a 'Foreign Trust', and filing Form 3520, Form 3250-A (and potentially Form 8621) is a pain.

 

The Serbinski forum was very helpful when I was navigating these sorts of things.

[Marzena & Stephen 544]

9 minutes ago, lilacmarie213 said:

This isn't something the consulate needs, but it is something that you will need to report in your US/IRS taxes every year.

• FBAR dictates that anything over $10,000 aggregate in foreign accounts must be disclosed and filed yearly. This is a pretty straightforward form that is submitted online as FinCen Form 114. Even if you are not earning interest, etc., you must report.
• You may need to file IRS Form 8938 if the aggregate value of foreign accounts exceeds $50,000.
• All interest/dividends/etc. income from foreign accounts should be included on your IRS 1040.
• All foreign income must be reported on the Schedule B IRS form (even if you did NOT receive $1,500 or above).

Other reporting requirements are based on when you take distributions from the RRSP/Pension plans.

• I believe pension income is supposed to be filed as if they were received by the SSA (so basically you'd pretend you received SSA-1099 form, see https://www.irs.gov/pub/irs-pdf/p915.pdf page 6) due to the tax treaty between the US/Canada. It would be reported on the IRS 1040 form as if it was received as an SSA benefit. 
• RRSP/RRIF distributions are also reported on the 1040 Form, on line 16a and 16b (https://www.irs.gov/pub/irs-drop/n-03-75.pdf).
• You may also need to file Form 1116 (Foreign Tax Credit), if you paid any foreign taxes that year to prevent double taxation.

TFSA/RESPs should be closed the year prior to moving to the US, as they are often considered a 'Foreign Trust', and filing Form 3520, Form 3250-A (and potentially Form 8621) is a pain.

 

The Serbinski forum was very helpful when I was navigating these sorts of things.

Thank you very much for the information.

 

Something that keeps confusing me as well is, if i move to the usa this november 2017, do i need to file 2017 taxes in canada or the usa ? Many people are saying file in Canada as i would not have worked in ths USA yet  and will not have an ead before the end of 2017..and keep telling me to also file a NIL tax return for USA?  

 

i thought i had to in only one country ?

I will also be receiving a return this year so i definetly thought i needed to file in Canada to get that return.. at least that is what i have read on service canadas site. But at what point do i have to file in usa?

 

I am wondering if i should get an accountant in the USA the first year.  My taxes will not be complicated but i dont want to get in trouble if i miss something small.

 

Do not feel obligated to answer please. Aby information is super helpful! Thank you so much! 

[Udella&Wiz 325]

I moved in Nov a few years back - I filed Canadian as expected since I'd worked 11/12 of the year in Canada and had Canadian income - my US husband also claimed me on his US taxes that year (using Turbo tax - it asked all the right questions) and included my World wide income (aka - my Canadian income converted to US dollars, which was a wash due to tax treaties). We didn't pay taxes twice.

[Marzena & Stephen 544]

48 minutes ago, Udella&Wiz said:

I moved in Nov a few years back - I filed Canadian as expected since I'd worked 11/12 of the year in Canada and had Canadian income - my US husband also claimed me on his US taxes that year (using Turbo tax - it asked all the right questions) and included my World wide income (aka - my Canadian income converted to US dollars, which was a wash due to tax treaties). We didn't pay taxes twice.

Thank you very much! 

[lilacmarie213 4]

Since you're on a K1 - unless you're also getting married in November/December 2017, you wouldn't be part of joint tax filing for US taxes in 2017, and would likely just need to file Canadian taxes that year.

[Marzena & Stephen 544]

15 minutes ago, lilacmarie213 said:

Since you're on a K1 - unless you're also getting married in November/December 2017, you wouldn't be part of joint tax filing for US taxes in 2017, and would likely just need to file Canadian taxes that year.

So we plan to get married at the courts on paper right away (and have a wedding a year or so later) that being said i guess we file as married (but it doesnt have to be joint from my understanding) (we dont want it joint as he has rental properties under his tax return and it may get messy)

 Ive never seen a us tax return so im not 100% sure how it works  the 1st year. File the canadian than file the us return as married (seperately from my husband when the time comes) but somehow state i filed in canada so that its a wash? I guess i have to look more into it when the time comes🙈

[eastcoastgroove 329]

Thank you for asking the tax question, as I have been wondering what to do myself since I'm moving next week/ getting married soon after and I definitely won't be working in the US until 2018. Still kind of confused but at least I know for sure I need to file in Canada lol

[Udella&Wiz 325]

Really - it's less complicated than it sounds. I filed my Canadian  as usual (used to do it had written because it was simple). Yes....I had to state married on my Canadian return (I got married in late Nov here in the US after arriving on a K1) and then of course he had no Canadian social....so his income (totally NOT Canadian) etc.....was NOT involved in my Canadian return....just his name.

 

Turbo Tax literally asked every intelligent question and we reported my Canadian income as my World wide income on the his US return. I was not taxed twice and he claimed me as a dependent.

 

Reminder - you have to present co mingled finances and tax returns in future USCIS stages....doesn't hurt to start filing taxes jointly from the get-go. For me this was how I did it - I'm sure others may have other opinions. We tried filling out the US taxes both ways (with and without me...but we were married and had to note it 'I think" )and it was no less advantageous to include me so away we went.

 

10 yrs later I can confirm no negative impacts from doing that.....Uncle Sam has successfully taken my money for the last 9 :|

[eastcoastgroove 329]

On 2017-08-29 at 6:59 AM, Udella&Wiz said:

Really - it's less complicated than it sounds. I filed my Canadian  as usual (used to do it had written because it was simple). Yes....I had to state married on my Canadian return (I got married in late Nov here in the US after arriving on a K1) and then of course he had no Canadian social....so his income (totally NOT Canadian) etc.....was NOT involved in my Canadian return....just his name.

 

Turbo Tax literally asked every intelligent question and we reported my Canadian income as my World wide income on the his US return. I was not taxed twice and he claimed me as a dependent.

 

Reminder - you have to present co mingled finances and tax returns in future USCIS stages....doesn't hurt to start filing taxes jointly from the get-go. For me this was how I did it - I'm sure others may have other opinions. We tried filling out the US taxes both ways (with and without me...but we were married and had to note it 'I think" )and it was no less advantageous to include me so away we went.

 

10 yrs later I can confirm no negative impacts from doing that.....Uncle Sam has successfully taken my money for the last 9 :|

Thank you for your detailed response!!

[dburnt 59]

On 8/27/2017 at 5:28 PM, lilacmarie213 said:

This isn't something the consulate needs, but it is something that you will need to report in your US/IRS taxes every year.

• FBAR dictates that anything over $10,000 aggregate in foreign accounts must be disclosed and filed yearly. This is a pretty straightforward form that is submitted online as FinCen Form 114. Even if you are not earning interest, etc., you must report.
• You may need to file IRS Form 8938 if the aggregate value of foreign accounts exceeds $50,000.
• All interest/dividends/etc. income from foreign accounts should be included on your IRS 1040.
• All foreign income must be reported on the Schedule B IRS form (even if you did NOT receive $1,500 or above).

Other reporting requirements are based on when you take distributions from the RRSP/Pension plans.

• I believe pension income is supposed to be filed as if they were received by the SSA (so basically you'd pretend you received SSA-1099 form, see https://www.irs.gov/pub/irs-pdf/p915.pdf page 6) due to the tax treaty between the US/Canada. It would be reported on the IRS 1040 form as if it was received as an SSA benefit. 
• RRSP/RRIF distributions are also reported on the 1040 Form, on line 16a and 16b (https://www.irs.gov/pub/irs-drop/n-03-75.pdf).
• You may also need to file Form 1116 (Foreign Tax Credit), if you paid any foreign taxes that year to prevent double taxation.

TFSA/RESPs should be closed the year prior to moving to the US, as they are often considered a 'Foreign Trust', and filing Form 3520, Form 3250-A (and potentially Form 8621) is a pain.

 

The Serbinski forum was very helpful when I was navigating these sorts of things.

The only thing that may require additional research is on pension income - SSA income has a unique formula for taxation purposes.  Not all Canadian pension income falls into the treaty.  Private pension payments (i.e. from your employer) is not the same as SSA.  SSA would likely be CPP payments, but not sure how OAS is treated.  And just fyi...Turbo Tax does NOT handle foreign pension at all.

[Marzena & Stephen 544]

22 hours ago, dburnt said:

The only thing that may require additional research is on pension income - SSA income has a unique formula for taxation purposes.  Not all Canadian pension income falls into the treaty.  Private pension payments (i.e. from your employer) is not the same as SSA.  SSA would likely be CPP payments, but not sure how OAS is treated.  And just fyi...Turbo Tax does NOT handle foreign pension at all.

Sorry my original post was regarding pension account similiar to rrsp.. not a payment. My point was these accounts grow and i wanted to make sure they are not taxable. I didnt get a chance to read what others wrote yet tho:)