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QUESTION:
Hello
Hopefully you can assist; my questions may apply to quite a few people. I am a Canadian working in the US.
1) I am moving to a new company but do not want to roll over my 401K to the new company's plan as I plan to leave this new company ASAP. Also, I have a US IRA that I want to close out and move to my CAN. RRSP.
How can I move my US 401K and IRA savings to my Can. RRSP account without being taxed? If the 401K/IRA funds are taxed, how can I get a subsequent refund?
2) I want to stop paying US tax and pay Can. tax. Can you suggest how to go about this?
I gave up my Can. apt. but am getting another. I am planning to return to Canada eventually.
Thank you for the advice.
KXXXXXXXXXXXXXXXXXXXXXXXXXXXX
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david ingram replies:
Although Canada will allow the rollover of both an IRA and a 401(K) into a RRSP (it is in the RRSP book), you will spenmd a lifetime trying to get the US company to roll it over into a Canadian plan. No matter how much paperwork you give them, they administrators just do not want to allow the tax free rollover.
If you do take them out and put them into the Canadian plan, the same thing happens with the IRS/ they do NOT want to give you a refund. Do NOT even attempt it. Life is too short. Leave the money in the USA.
I wonder what your visa for the US is. If you have just changed jobs, it implies an H1m or a green card or a simple TN visa. In the alternative, you might be a dual citizen and will "always" have to file a US tax return no matter where you live.
It does not matter though because if you are earning the money in the US, you do not have the choice of only filing in Canada. You have to file in the USA and your first tax liability is to the US. If, for some reason or other, you have managed to make yourself taxable in Canada as well (you should not be), then you would convert the US dollars to Canadian dollars and calculate the Canadian tax. Then you would do a foreign tax credit calculation and should get credit for all your US taxes on the Canadian return.
Go to www.centa.com and click on and read US/Canada taxation at the top left of the page.
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
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