Weekly Tax Tips
Special Canadian election due April 30 if you have
a ROTH IRA
Date: 11 Mar 2011
Do you have a ROTH IRA? This is a US savings plan, somewhat similar to the Canadian Tax Free Savings Account, in that earnings in this plan are tax free for US tax purposes. You may have one of these accounts if you lived in the US in previous years, and contributed to such a plan, or converted a regular US Individual Retirement Account (IRA) account to a ROTH IRA.
Because the earnings in these plans are not taxable for US tax purposes, you may not be aware that such tax free status is not generally available while living in Canada. However, if you have such an account, and have not contributed to it since becoming a Canadian resident, or after December 31, 2008, (whichever is later), you have until April 30, 2011 to file an election with the Canadian government to ensure that Canadian tax on earnings within such an account will be deferred until such time as the funds are withdrawn from the IRA.
For more information, read our Tax Alert titled Special Canadian election due April 30 if you have a ROTH IRA.
This tax tip is a publication of BDO Canada LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of 11 Mar 2011.
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