Global News – Make the most of your money
At MCA Cross Border Advisors, our clients often ask us questions about retirement savings accounts and their various cross-border considerations. Recently, Matt Altro, our President & CEO, was asked to answer a question submitted to Global News by one of their readers. The question was submitted by a US citizen living in Canada, and asks about what type of savings account they can hold.
You can see part of Matt’s answer to this question below, click here to view it on the Global News website.
Make the most of your money: “The Question”
“I am young and would like to put my savings into an account where they are still accessible to me before retirement. From what I understand, this means a tax free savings account (TFSA) would be a better option than a registered retirement savings plan (RRSP). However, I’m also a dual citizen of Canada and the U.S., and I’ve read that U.S. citizens are advised NOT to put their money into TFSAs because, while these accounts are tax-free in Canada, the U.S. government can still tax your investment earnings in a TFSA. Are there any other options for someone who is looking to grow their savings without having them locked away until retirement?” -123 Money Reader
“Congratulations on starting a savings habit while you’re young. You’re right that I would recommend that you steer clear of the TFSA, one of many tax traps that exist for U.S. citizens in Canada. Not only is the income taxable in the U.S., but also the IRS is likely to view the TFSA as a foreign trust, which results in additional complicated and costly annual foreign trust reporting. […]