US Taxes and RRSP

[Frenchy 0]

It's the most wonderful time of the year!!! Last year I filed in the US for the 1st time. I hired H&R Block, payed $250 to later throw everything out and do it myself. They had NO understanding of the Canadian system, this Sr Accountant I had did not even know what a RRSP was... Now I am starting to work on this year's filing, and I am still so confused!

How do I declare my Canadian RRSP? If I did not make any deposits in my account in 08 I do not receive any documents from my financial institution, yet I know I have to declare stuff every year. I have searched high and low for information, purchased a book called "A Canadian in America" which has multiple chapters on RRSPs and taxes yet they do not explain how to do this. Does anybody here have any inside knowledge on this? I don't mind paying for these services, as long as they are services I will use and not throw away (Thanks H&R).

I have no idea how to obtain information on gains or losses, and getting information from my institution at this time of the year is near impossible...

Any help would be greatly appreciated. Thanks!

[Krikit 1,163]

Have you read this thread? Cross Border Taxes Thread

[Flames9_RN 358]

Like krikit said, and google form 8891, very easy form to fill out and check out http://forums.serbinski.com/ and search RRSP or form 8891

[Udella&Wiz 325]

If you received no income from it, why do you have to report it on your US taxes?

I have a 'locked in' RRSP in Canada which rolls the interest back in immediately so I don't receive a cent until age 60 or 65, whatever it is. I therefore did not receive a tax slip from the Canadian institution and I will not have anything to declare on either my Cdn or US taxes.

Hope this helps...you could also contact the financial institution and ask if you were supposed to receive any tax slips

Edited March 31, 2009 by Udella&Wiz

[Flames9_RN 358]

I would check into ur RRSP, I had been told that if you have RRSP, no matter if u add to them or take out to them, you still had to fill out the form 8891. The feds wont tax you on it, ur just notifying them. I do believe the rules of how the USA handles RRSP changed last yr though. I no longer have RRSP, so I don't pay that much attention. Checkout that Sebrinski tax forum, used to have some good info on there

[Udella&Wiz 325]

Hmm, I had no idea this form was out there....I'll have to recheck to see if my fund is 'registered' since they are very specific and it's is either an RRSP or RRIF

I believe mine is considered an LRIF - as I mentioned above, it is entirely locked until a certain date.......so perhaps I don't qualify. You know - considering I worked from an Insurance and annuity company, you'd think I might have a clearer understanding of it all.

Is it just me - the remainder of the year I consider my self to have an excellent grasp of the english language but reading the double talk on tax related forms makes you crazy!

[Flames9_RN 358]

Well for fun, I would post that question on the Sebrinski forum! I havent visited that site in a few yrs now, but 99% of the questions were answered by two guys, 1 was named "Nelson" Seemed to be fairly knowledgeable, but he got a bit grumpy if many people kept asking the same question,lol Form 8891 has only been around for a few yrs, so in the past (few yrs back) when I called the IRS, they had no clue about it either,lol I have been told that soem States wil tax you on the $$$$ (feds won't). no clue if that is true or not, I know Virginia didn't tax me on my RRSP when just left them alone!!

[Frenchy 0]

WOW! Have any of you read the definitions of "beneficiary" vs "annuitant"? Are we all speaking the same language here? Confusing!

I was told that if you chose to keep your RRSPs in Canada and become a resident of the US you will have to include it in your income return every year wether you made a contribution to it or not, wether you made a withdrawal from it or not. As far as 08 goes, there was definitely no increase of funds, like most people I saw my savings dwindle last year. So at least I have no gains to report. But I've had numerous accountants tell me: "Oh you have to make special declarations and they are verrryyyy complicated, but I won't tell you how to do them so I can charge you $750 to do it for you!"

OK, I'll download the 8891, study it with my dictionary, and try the Sebrinski forum. Thanks for the insights! Any other hints are truly appreciated!

Oh, and did you guys know you have to declare every account you own in Canada (or other countries) by June? All this is so complicated!

[Udella&Wiz 325]

WOW! Have any of you read the definitions of "beneficiary" vs "annuitant"? Are we all speaking the same language here? Confusing!

I was told that if you chose to keep your RRSPs in Canada and become a resident of the US you will have to include it in your income return every year wether you made a contribution to it or not, wether you made a withdrawal from it or not. As far as 08 goes, there was definitely no increase of funds, like most people I saw my savings dwindle last year. So at least I have no gains to report. But I've had numerous accountants tell me: "Oh you have to make special declarations and they are verrryyyy complicated, but I won't tell you how to do them so I can charge you $750 to do it for you!"

OK, I'll download the 8891, study it with my dictionary, and try the Sebrinski forum. Thanks for the insights! Any other hints are truly appreciated!

Oh, and did you guys know you have to declare every account you own in Canada (or other countries) by June? All this is so complicated!

Beneficiary of the RRSP means - the person who will receive the money (You) - it doesn't mean your husband or wife

Annuitant means relatively the same thing in reference to investment Funds 'RRIF' - you're the person who will receive the payments

I guess I don't understand the complexities of the law - if you aren't reporting these on your Cdn taxes (or maybe you are)...why are we doing it on the US taxes? I could understand if we cashed in, then yes, they should be taxed. I forgot to see the exact definition of mine last night.

[S & J 0]

The 8891 is so you don't have to report interest accrued every year on your Form 1040. Interest on RRSPs is taxable in the US unless you elect it not to be.

Also, the value of the RRSP is the value in US$ on the date you officialy became a resident of the US - this is a very important number for line 16a later on. Figure it out now because if you are not cashing in for 30 more years that will be a hassle.

And don't forget Form 90-22. You can get a major fine if you don't report accounts over $10,000.

Just an FYI, I forgot to send in my 8891 with my US tax return. I called and they said to wait until it was processed and then attached it to a 1040x, but make a note at the top of the 1040x what you are doing because if there is no info to change they might not understand .

[Udella&Wiz 325]

Ahh - so here is my thread from my inquiry in that forum:

http://forums.serbinski.com/viewtopic.php?t=3309

Post subject: LRIF or LIRA - how do I declare on US taxes

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I moved very late in 2007 to the US, so the 2008 tax return is essentially my first here in the US. My concern is how do I (or do I) need to declare that I have a Locked in retirement fund back in Ontario? The form 8891 which is frequently mentioned here does not appear to apply to this type, so I am a little bewildered.

Any interest or yearly dividends are rolled immediately back into it, I do not receive a cent. I have nothing to report on my Canadian return, so I'm confused how to declare it for the US.

Thanks

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nelsona

Posted: Wed Apr 01, 2009 8:25 am Post subject:

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Don't be confused. A LIRA or an LRIF and simply RRSPs or RRIF with a lock feature. They are covered by 8891.

You use 8891 to defer US taxation on internal earnings until you begin withdrawing funds. Its important to file 8891 for each account.

The other important thing for you to do is determine the BOOK value on your account on January 1, 2008 (that's 2008 not 2009). This bbok value will essentilly be the amount of RRSP/RRIF/LIRA/LLIF withdrawls you make while in US that are not taxable in US.

When you begin to draw down or collapse your funds, you will use this figure (which doen't appear anywhere on form 8891, btw) to exclude some or all of the withdrawal from US taxation.

You don't nned to concern yourself with that now, but you do need to record this figure in your records, for each account you have.

_________________

nelsona non grata... and non pro

Edited April 1, 2009 by Udella&Wiz

[EED 0]

The 8891 is so you don't have to report interest accrued every year on your Form 1040. Interest on RRSPs is taxable in the US unless you elect it not to be.

Also, the value of the RRSP is the value in US$ on the date you officialy became a resident of the US - this is a very important number for line 16a later on. Figure it out now because if you are not cashing in for 30 more years that will be a hassle.

And don't forget Form 90-22. You can get a major fine if you don't report accounts over $10,000.

Just an FYI, I forgot to send in my 8891 with my US tax return. I called and they said to wait until it was processed and then attached it to a 1040x, but make a note at the top of the 1040x what you are doing because if there is no info to change they might not understand .

This is the interesting part for us....we consulted with accountants here and in Canada, I am finding that there is no consensus, some say the value at year-end and some say the value when you officially activated your visa. We finally decided to use the year end value because we had statements to back up the numbers.

We were also told that some states (i.e. Cali) will tax you on the annual gain reported on your 8891....I am not even looking into this until next year.

[Flames9_RN 358]

Ahh - so here is my thread from my inquiry in that forum:

http://forums.serbinski.com/viewtopic.php?t=3309

Post subject: LRIF or LIRA - how do I declare on US taxes

--------------------------------------------------------------------------------

I moved very late in 2007 to the US, so the 2008 tax return is essentially my first here in the US. My concern is how do I (or do I) need to declare that I have a Locked in retirement fund back in Ontario? The form 8891 which is frequently mentioned here does not appear to apply to this type, so I am a little bewildered.

Any interest or yearly dividends are rolled immediately back into it, I do not receive a cent. I have nothing to report on my Canadian return, so I'm confused how to declare it for the US.

Thanks

--------------------------------------------------------------------------------

nelsona

Posted: Wed Apr 01, 2009 8:25 am Post subject:

--------------------------------------------------------------------------------

Don't be confused. A LIRA or an LRIF and simply RRSPs or RRIF with a lock feature. They are covered by 8891.

You use 8891 to defer US taxation on internal earnings until you begin withdrawing funds. Its important to file 8891 for each account.

The other important thing for you to do is determine the BOOK value on your account on January 1, 2008 (that's 2008 not 2009). This bbok value will essentilly be the amount of RRSP/RRIF/LIRA/LLIF withdrawls you make while in US that are not taxable in US.

When you begin to draw down or collapse your funds, you will use this figure (which doen't appear anywhere on form 8891, btw) to exclude some or all of the withdrawal from US taxation.

You don't nned to concern yourself with that now, but you do need to record this figure in your records, for each account you have.

_________________

nelsona non grata... and non pro

wow, you got nelson in a good mood,lol

[Udella&Wiz 325]

haha - lucky me. A few posts later he got cranky - he refuses to answer any questions about filling in particular field - just says to do a search on the form number.

OK bud, but your site search sucks big time...I can't return to teh search results after having read a particular post...anyway.

I have also missed filling out the other form called TDF90-22.1 (someone mentioned above) - which states the total account values of anything foreign - including bank account, RRSP etc etc. Although this one doesn't get filed with your taxes.

Man - glad this is the first "REAL" tax year we're doing this.

Any one know - do i fill out the 8891 every year?

[Flames9_RN 358]

I belive you do fil out the form 8891 every year!! I never told them about my cdn bank acct. It only has a few cents in it normally!! Only use it when i travel back to canada