October 16th, Crypto, 30% IRA withholdings and CRA FTC – Ep.23

Summary:

In the latest episode of “Crossing the 49th: The Crossborder Tax and Financial Planning Podcast,” host Newsglobal delves into some frequently asked cross-border tax questions. Here are the highlights:

1. October 15th Deadline: Phil discusses the implications of missing the October 15th deadline for US tax returns. This year, the deadline has been extended to October 16th due to it falling on a weekend. For those who miss this deadline, there’s an option to request an extension until December 15th by writing to the IRS. However, Phil strongly advises against relying on this unless absolutely necessary.
2. Crypto Reporting: A common query is whether hard wallet crypto assets need to be reported on the T1135 (foreign disclosure for Canadian purposes) or the FBAR. Phil’s advice is clear: when in doubt, report it. This ensures compliance and avoids potential penalties.
3. 30% Withholdings from US Brokers: Many Canadians with US IRAs face issues with US brokers withholding 30% of their distributions, instead of the treaty rate of 15%. Phil suggests moving the IRA to a Canadian broker to ensure proper withholding and avoid the hassle of filing non-resident US tax returns to recover the excess withheld amount.
4. CRA Disallowing Foreign Tax Credits: Phil addresses the challenge many face when the CRA disallows foreign tax credits. He emphasizes the importance of claiming the correct amount (15%) and seeking advice from a cross-border CPA to avoid prolonged disputes with the CRA.

Phil wraps up by thanking his subscribers and teasing upcoming content, including exciting guests for 2023 and 2024. He encourages listeners to reach out with any cross-border tax or financial planning questions.

Note: For those interested in the podcast, subscribing to Phil’s YouTube channel is recommended for the latest updates.