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David, I note in your response to another question a comment about "The reason today was so busy was the Oct 15th deadline for filing details of Canadian RRSP's for US citizens or US residents."
Are these details regarding 2002 or 2003 tax year? I was always under the impression that I, as a US resident, could make my RRSP contributions up to the same time as a Canadian. Am I incorrect?
Thanks for your time, I realize you're busy.
DXXXXX
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david ingram replies:
The Oct 15th deadline was to report the internal earnings in your RRSP to the IRS for US residents or US citizens living in another country with a Canadian RRSP or an Australian or a New Zealand equivalent.
If they chose to enforce them, there are severe penalties that can be imposed on a US citizen or resident who has a Canadian RRSP and does not report the fact and the earnings to the IRS and US Treasury.
Go to www.centa.com, click on Newsletters, click on 2003, click on August and read the details.
It is actually possible to pay $13,500 in fines, taxes and penalties on a $10,000 Canadian RRSP if you do not report them,. If you have a Canadian RRSP get the reporting done sooner, rather than later. Although the rules apply to 2001 and 2002, the IRS has waived the reporting for 2001 but is insisting on the reporting for 2002. Glad to help you prepare them, even if they are late.
I don't believe that the penalties will be applied heavily right now if you still report as soon as possible,.
AND, last but not least - You should likely not buy a Canadian RRSP if you are a US resident. George Hatton CA at (604) 913-9135 - [email protected] is very "UP" on these rules if you need help and I am not available.
Form TDF 90-1.22 also has penalties up to $500,000 plus 5 years in jail for failure to report the mere "existence" of a Foreign account. Check the TWO questions at the bottom of Schedule B of your 1040 for more information about foreign accounts.
and check http://www.irs.gov/pub/irs-fill/f9022-1.pdf for a sample of the form. Read the penalty provisions at the bottom.
Note that the TD F 90-1.22 does NOT go with the tax return. They go to the Department of the Treasury in Detroit.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321
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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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