5 Options for Canadians with US IRAs- Expat Tax Podcast

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Each year I help over 500 clients file their Canadian and US tax returns as well as plan for both their Canadian and US investment accounts. I also regularly help new US clients plan for their move to Canada.

Feel free to reach out via email at phil@philhogan.com or by phone or text here 250-661-9417.




On episode #5 of the Expat Tax and Financial Planning Podcast we discuss some options for Canadians holding US IRA accounts.

Whether you moved up to Canada with a pre-existing IRA or have inherited an IRA from a relative living in the US the following discussion should help you make a decision on what to do with your US IRA accounts.

Collapse the IRA and bring the money to Canada

  • A good option for small accounts
  • May work if your income is already low
  • Keeps things simple
  • 15% minimum tax for non-US citizens

Roll the IRA into a ROTH IRA

  • An option for Americans moving to Canada only
  • Works if your current tax rate is less than your future tax rate
  • Need Canadian ROTH election

Leave the IRA in the US

  • Simple option
  • Some US brokers can’t manage US IRAs for Canadians
  • Likely the US broker will not be able to take direction from Canadian clients
  • Foreign currency risk not properly managed
  • Most US brokers simply do not understand Canadian tax and financial planning

Transfer the IRA to an RRSP

  • Can help consolidate accounts
  • Works well for smaller accounts
  • Often suggested by Canadian investment advisors that cannot manage IRA accounts
  • Can only transfer approximately the amount of your Canadian source income for the year
  • May be able to eventually split RRIF payments
  • You’ll lose the ability to transfer IRA to beneficiaries tax-free

Transfer the IRA to a Canadian border with both a US and Canadian securities license.

  • Likely the best option for large accounts
  • Consolidate your investments in Canada for those moving to Canada permanently
  • Foreign currency risk can be managed
  • Co-ordinate planning with Canadian retirement accounts like RRSP and RRIF accounts
  • Non-spouse beneficiaries can inherit the IRA tax-free

Other issues to note about your IRA

  • Not reportable on form T1135
  • Cannot be split with spouse via pension split rules
  • Can only stretch IRA payments to beneficiaries up to 10 years
  • May be subject to US estate tax

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Disclaimer: The information contained in this Podcast and YouTube video is for information purposes only and should not be construed as tax or financial planning advice. Tax and financial planning rules change from year to year and the information contained within may be outdated. Ensure to engage an experienced and competent tax and financial planner to help you with your tax and financial planning needs.

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