Americans in Canada with an RRSP or TFSA have specific US reporting requirements. The forms are manageable once you know which applies to each account.
Lou is a tax-preparation tool, not a tax advisor. This article explains how Canadian registered accounts are treated on a US return. For advice on your specific situation, work with a qualified tax professional.
Most Americans in Canada know an RRSP is a retirement savings account. Fewer know what it looks like on a US tax return.
The RRSP and Form 8833#
Canada taxes RRSP growth only on withdrawal. The US-Canada Tax Treaty allows Americans to defer taxation on RRSP growth the same way Canadian residents do, so the account is not taxed annually on a US return.
To take that deferral, a treaty election is filed each year on Form 8833. The election keeps RRSP growth out of US taxable income until the account is drawn down.
An RRSP also appears on an FBAR if total foreign financial accounts exceed $10,000 at any point in the year, and on Form 8938 if the account's value meets FATCA thresholds.
The TFSA is treated differently#
A Tax-Free Savings Account is tax-free in Canada. The IRS does not recognize it that way.
Under US rules, a TFSA is treated as a foreign grantor trust. Income earned inside a TFSA, including interest and dividends, is taxable on a US return in the year it is earned. The account is reported on Form 3520 and Form 3520-A each year.
This catches a lot of Americans in Canada by surprise. The TFSA functions as intended in Canada; the US treatment is different.
Like an RRSP, a TFSA also appears on FBAR and Form 8938 if applicable.
The FHSA#
The First Home Savings Account is handled similarly to a TFSA under current US rules: as a foreign grantor trust. Income inside is taxable annually, and Form 3520 applies.
Where Lou fits#
Lou handles the RRSP treaty election on Form 8833, TFSA and FHSA foreign trust filings on Form 3520 and 3520-A, FBAR worksheets, and Form 8938. Your documents are processed locally in your browser. Nothing leaves your device.
Free to use. You pay to download the completed forms. 15-day refund if Lou does not work for your situation.
Lou is a tax-preparation tool, not a tax advisor.
https://lou.bigtimedesign.ca