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I'm a US citizen living in Canada as a permanent resident. I earn income and receive interest/dividends from both countries. I file income tax returns in both countries.

Every year I hear encouragement in Canada to contribute to a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP). And I hear encouragement in the USA to contribute to a Individual Retirement Account (which I already have, from working in the uSA) or a Roth IRA (which I also have). For people in one country or the other, those vehicles are great. But since I file taxes in both jurisdictions, I need to worry about how each country treats the other country's savings vehicles.

Are there any savings vehicles which are tax-advantaged for a taxpayer who files both Canadian and USA income tax returns?

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  • open two different accounts
    – CQM
    Jan 6, 2013 at 17:21

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You should talk to a US & Canadian tax advisers of course, but to the best of my understanding RRSP's are treated the same in the US and Canada. You have to file form 8891 with the IRS to get that treatment. I'd suggest getting a professional to explain about it.

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  • Thanks for the mention of RRSPs. This answer would be stronger with quotes from expert sources telling that an RRSP is indeed tax sheltered in both countries. You are right, this is no substitute for getting professional advice -- but professional advice in person doesn't enrich a Q&A site.
    – Jim DeLaHunt
    Jan 15, 2013 at 6:08
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    @jim linking directly to the relevant IRS form is not enough? See line 6.
    – littleadv
    Jan 15, 2013 at 6:49
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    Let's say "explaining" instead of "telling". Reference to tax treaty (with link), to IRS Notice 2003-75 RRSP and RRIF Information Reporting, maybe to a tax preparer article explaining it in human language. Plus, answer would be stronger if it could say why other common vehicles (TFSA, 401(k)) are not advantaged.
    – Jim DeLaHunt
    Jan 15, 2013 at 9:17

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