Moving out of country

[Guest Timbit]

Hi, I'm a Canadian citizen and I've worked in the USA for the last 3 years. During my time working I've opened up a Roth IRA and I also have a 401(k) plan with my company.

I have decided to move back to Canada. What I am wondering is what will happen to my Roth IRA and my 401(k) plans? What are the tax consequences of me moving? Will I be allowed to transact on my accounts? Will I be allowed to deposit money into my Roth IRA even though I do not live in the USA anymore? What am I allowed to do with these accounts? What am I not allowed to do?

If anyone has some knowledge of what happens, I'd like to know! I'd also like to know what my options are (if any).

Thanks in advance,

-Dennis

[mbozek]

Generally all pension benefits tax deferred under US tax law are US source income and are taxed upon withdrawal by a foreign employee. However, there is a US tax treaty with Canada which exempts certain retirement benefits earned by Canadian citizens from us taxation if the benefits are subject to canadian taxation. You should be able to find an IRS publication on tax treaties on the IRS web site. I dont know how the roth IRA will be taxed under US or Canadian tax law.

[david rigby]

US / Canada Tax treaty

http://www.irs.gov/pub/irs-trty/canada.pdf