• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Edmundson CPA, PLLC

Formerly Edmundson & Company, CPAs

  • Home
  • About Us ▼
    • About Us
    • Hours
    • Drew Bio
    • Policies
    • Contact us
  • Services ▼
    • Tax planning
    • Accounting
    • Tax Preparation
    • Consulting
  • Newsletters
  • Blog
  • Client forms
  • Links
  • Secure Portal
  • Sitemap
You are here: Home / Tax / Canadian RRSPs and RRIFs relief

October 13, 2014 By

Canadian RRSPs and RRIFs relief

Canadian RRSPs and RRIFs election change

Finally IRS has come to their senses. Prior to October 7, 2014 Canadians subject to U.S. income taxes had to make a written election to avoid paying tax on what they earned in RRSPs and RRIFs. If a Canadian failed to make the election on their first return, they had to report and pay tax on the earnings in their RRSP or RRIF every year. Fortunately, the pain could be stopped by making a later election but the taxpayer could not get the tax back for years prior to the election.

RRSP and RRIF acronyms

RRSP = registered retirement savings plan
RRIF = registered retirement income funds

These Canadian plans are similar to the U.S. individual retirement plans (IRAs). plan.

The Change

This is probably one of the most frequently missed elections. I have a hard time figuring out who would not want to make this election if they knew about it. Now the IRS will assume affected taxpayers made the election unless they the taxpayer affirmatively elects out by reporting the income and paying the tax each year. Not only does it help Canadians who are new U.S. taxpayers, it also retroactively helps those who did not make the election and did not report the income all the way back to 1996.

You can read the press release (IR-2014-97) at the IRS website. At the bottom of the release, IRS provides a link to a PDF with the official announcement.

Please note that this notice does not eliminate the need for other forms such as the FinCen Form 114 that reports foreign financial accounts. The RRSPs and RRIFs may also have to be reported on Form 8938. Penalties for failing to file either form are quite severe, especially the penalty for FinCen 114.

IRS – protecting Canadian retirement savings since 2014!

Related

  • NC tricking taxpayers?
  • October 28, 2015
  • In "Tax"
  • Tax Extenders revived by PATH
  • January 22, 2016
  • In "Tax"
  • Bad tax advice does not save taxpayer
  • August 18, 2014
  • In "Financial"

Filed Under: Tax Tagged With: FinCen 114, Foreign, Individuals, IRA

Primary Sidebar

Recent Posts

  • Tax Season in the Era of the Coronavirus
  • Foreign financial filing due (FinCen 114)
  • NC extensions denied in error
  • Forms 1099 due by 03/31/2016!
  • Valuing noncash contributions

Categories

Tags

2014 ACA business taxes C Corporation Charitable contributions corporation Donations due dates Electronic filing Electronic payments entity choice estate expiring tax provisions filing statistics FinCen 114 Foreign form of business healthcare Income tax organizer Individuals IRA IRS IRS waste liability protection LLC mileage NC taxes new taxes Obamacare occupancy taxes Our firm Pay IRS Preparers Sales taxes SBA S Corporation signature Tax deductions tax extenders tax planning vehicle taxes where's my refund will withholding year-end

Edmundson CPA, PLLC

102 Commonwealth Court
Suite J,
Cary, NC 27511-4437
Phone: (919) 460-9966
Fax: (919) 380-0010
Email: info@nccpa.com

Footer

Edmundson CPA, PLLC

102 Commonwealth Court
Suite J,
Cary, NC 27511-4437
Phone: (919) 460-9966
Email: info@nccpa.com

Hours

Office hours

Search

Categories

  • Business
  • Financial
  • Firm
  • QuickBooks
  • Tax
FACEBOOK ·TWITTER ·LINKEDIN Copyright © 1998–2021 · Terms and conditions