If you’re a Canadian living in the U.S. and you have a Registered Retirement Savings Plan, your tax world is a little bit complicated. Heads up.
COMPARISON: Canadian “RRSP” and U.S. “IRA”
The RRSP and its U.S. equivalent–the Individual Retirement Account or “IRA” work in much the same way: you make a contribution to the account. You get a tax deduction for the contribution to the account.
Money stays in the account and earns investment returns, and you don’t pay income tax on the investment returns until you pull money out of the account. At that point the entire withdrawal is taxable income to you.
Continue reading →