F
My_question_is: Applicable to both US and Canada
Subject: Canadian Working U.S., Living in Cnada, (Tax Q.)
Expert: taxman at centa.com
Date: Sunday October 23, 2005
Time: 03:35 PM -0700
QUESTION:
I work in the U.S. , live in Canada and I contribute to my company matched
401k. I also purchase RRSP's in Canada. Is this the correct thing to be
doing, or should I be pursuing another avenue? Thanks in advance.
----======================================
david ingram replies:
Unless your employer is matching your 401k contributions, quit them NOW.
The reason is that they are not a deduction on your Canadian return and will
be taxable to you when you take them out.
If your employer IS matching the funds, you would be better off having the
employer provide their matched half to you to incest in a Canadian RRSP.
Of course, if you have a non-deductible mortgage in Canada, I can make a
good argument that you should not have an RRSP either and have a book coming
out at Xmas on that subject called the CEN-TA CLAUSE.
Make sure that you claim the State tax paid, the Social Security paid, the
Medicare Paid AND the federal tax paid as a foreign tax credit on line 431
on Schedule 1 and the comparative line of your provincial 428 when doing
your tax returns. Many Canadian preparers are not claiming the Social
Security and Medicare paid as a foreign tax credit because of a bulletin
that The CRA issued a couple of years ago. the bulletin said that another
country's social security was NOT eligible for a Canadian Foreign tax credit
and a lot of preparers stopped there. However further along in the
bulletin, it was very clear that it WAS deductible if part of a treaty. In
the case of the US and Canada, there is a treaty. If you have failed to
deduct it, you can amend back to 1994 before Xmas and back to 1995 after Dec
31, 2005.
Answers to this and other similar questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, I, david ingram am a regular
guest on Fred Snyder of Dundee Wealth Managers' LIVE talk show called "ITS
YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the internet
at
www.600AM.com <http://www.600am.com/>
Call (604) 280-0600 to have your question answered. BC listeners can also
call 1-866-778-0600.
Callers to the show and questioners on this board can also attend the
Thursday Night seminars on finance and making your Canadian Mortgage
Interest deductible.
And for those in the Vancouver area, Fred is running an infomercial for 1/2
hour every night in October on Channel 10 television at "groooaaannnn" 1 AM
in the morning. It has a couple of useful concepts in it that can be
recorded to really get the idea.
Every Thursday Evening, Fred Snyder of Dundee Wealth Management conducts one
of 17 different financial seminars in the boardroom of his office
Time: 7:00 to 9:30 PM
Date: Every Thursday evening
Place 1764 West Seventh
Vancouver (corner of Burrard)
Phone (604) 731-8900 to register
No cost - no obligation
Topics always cover mortgage interest as a deduction
other topics - getting the mortgage, estate planning, critical care
insurance, income taxation, differences between stocks and bonds, and
usually the most innovative HELOC mortgage offered in Canada from Manulife
Bank
If you are starting in downtown Vancouver and do not want to go home first,
one of the excellent THAI HOUSE restaurants is in the same building and
makes a nice start to the evening.
I, david ingram, manage to make three out of 4 of them to cover mortgage
interest as a deduction and give the class an adding test.
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
Home office at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week (please do not fax or phone
outside of those hours as this is a home office)
email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com/> www.david-ingram.com
<http://www.david-ingram.com/>
Disclaimer: This question has been answered without detailed information or
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