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.
Just wanting to get some advice on withdrawing my RRSP to pay my house here in the US. I am a dual citizen living in the states. Worked in canada for 10 years, about 10 ago.
Thank You for your time.
Canada will withhold 25% of your withdrawal from the RRSP. If your current tax rate in the US is less than 25% you’ll only pay a total of 25% tax on the withdrawal. If you US rate is more than 25% you may want to calculate your non-taxable earnings in your RRSP to reduce the taxable amount.
If you income is low it’s also possible to prepare a special Canadian tax return (section 217 tax return) to try and reduce the 25% tax, however your RRSP income would have to be at least 90% of your worldwide income for that particular year.
You’ll also have to consider state tax issues if you live in a State with income tax.
Hope that helps. If you need to work out the specifics I can be reached at 250-661-9417.
Phil Hogan, CA