Question
“My husband and I are working in the US right now. He’s on a L1 visa, and I’m an L2. We’ve been here since 2019, and we were wondering about a few things.
I’m assuming I won’t have to fill out a Canadian tax return for 2020? I still have a TFSA, and will be filling out the 8858 instead of a 3520 – Is this okay? What about my RRSP? I still have a Canadian bank account with more than $10k in it, so I need to do FBARs too?”
Answer
There are a lot of parts here, so we will break it down into chunks.
- Because you are a US resident for tax purposes, you do not need to file a Canadian tax return for 2020.
- RRSP’s don’t need to be reported. Form 8891 used to be used for this, but that form has been eliminated by the IRS.
- There hasn’t been any official guidance on the 8858 vs 3520. Typically the 3520 is used, as generally speaking the TFSA appears to meet the foreign trust criteria, but I’ve seen it done both ways.
- Speaking of TFSA’s, if you’re planning on staying in the US for a long period of time (longer than a year) you may want to look at closing the TFSA to avoid excess paperwork.
- Because the Canadian bank account is over $10k, and you’re technically a US person (L-2 visa), you need to file the Foreign Bank and Financial Accounts on FinCEN Form 114 (FBAR’s.)
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