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Discussion Starter · #1 ·
Okay friends. I think i need to submit forms 8621 for each Canadian mutual fund, including TFSA - but my accountant doesn't do that. I'm on my own with this and it seems very complicated. the IRS form 8621 information sheet is not helpful at all. The only examples I can find onlie are for training accountants with advanced degrees.
We're retired as of mid-2020.
I paid a US tax advisor to discuss this,, but she said they don't file 8621s...
Our joint income is < $30,000 so i really can't afford to pay a lot for tax advice. In Canada the filings are simple online, but USA.... yikes
This is the one form I need help with! Any ideas would be greatly appreciated
 

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brthomas9 -- I have never utilized this form. I learned a long time ago, that investing in "Passive Foreign Investment Funds" (PFICs,) was a nightmare. With that said, I would rid myself of these investments. But if you do want to keep them, the IRS has fillable forms that you can complete and submit with your return: About Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund | Internal Revenue Service (irs.gov) . Good luck! Cheers, 255
 

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Discussion Starter · #3 ·
Dear 255, it's truly a mystery to me that everyone seems of the same opinion that investing in PFICs should be avoided. In Canada there are strong tax incentives to invest in Tax Free Savings Accounts (very similar to Roth IRAs) aimed at encouraging youngest people to save for the future including the possibility of buying a house! And also for Registered Education Savings Plans that can be used by any member of the family. A Canadian mutual fund frankly makes a lot more sense than individual stock investments.
the irs information sheet for the 8621 is an absolutely impossible document to understand - and what's available online as examples are only for CPAs - to purchase sotware.

so, please, anyone out therr who actually has usd this form please do weigh in... we might all benefi from the shared learning. I'm stilll hoping!! tax deadline is 15th June this year even though FBAR deadline is 15 October.
255 - so where do you think i should be putting my money? haha, can't even open a new checking or savings account without a US zipcode - nor do i qualify even for a $500 BoA credit card even though I've had direct deposit to a BoA checking account for 20+ years (pay from US employer deposited directly for over 15 years). Alas!
 

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brthomas9 -- People generally avoid PFICs from a U.S. tax reporting perspective, because of the additional reporting requirements. I am sure the Canadian Tax Free Savings Accounts are great for Canadians, just like the U.S.'s various tax free and tax deferred savings accounts are great for Americans and U.S. residents (since other countries don't have citizenship based taxation, like the U.S.) The problem is that the various countries tax rules don't necessarily play well with each other.

I am aware that plenty of folks co-exist by reporting utilizing the various information returns on the U.S. side (like the 8621.) I am also sure there are plenty of others that just don't bother to report (the U.S. system is basically on the honor system -- especially for overseas filers.)

Know also, that CPAs, in general do not know everything. The 8621 might be "outside their wheelhouse."

Remember to, if you haven't figured it out yet, you can always file an extension 2020 Form 4868 (irs.gov) .

I've primarily invested in individual stocks myself -- primarily to avoid U.S. reporting requirements. Cheers, 255
 

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Okay friends. I think i need to submit forms 8621 for each Canadian mutual fund, including TFSA - but my accountant doesn't do that. I'm on my own with this and it seems very complicated. the IRS form 8621 information sheet is not helpful at all. The only examples I can find onlie are for training accountants with advanced degrees.
We're retired as of mid-2020.
I paid a US tax advisor to discuss this,, but she said they don't file 8621s...
Our joint income is < $30,000 so i really can't afford to pay a lot for tax advice. In Canada the filings are simple online, but USA.... yikes
This is the one form I need help with! Any ideas would be greatly appreciated
Heck, I'm a tax professional, US citizen resident of Canada who owns a handful of Canadian mutual funds and I...completely ignore 8621. I report the funds for FBAR purposes and all the income distributions, but 8621 is just too ridiculous. I'll happily risk the audit & any reassessment. YMMV.
 

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Discussion Starter · #6 ·
Heck, I'm a tax professional, US citizen resident of Canada who owns a handful of Canadian mutual funds and I...completely ignore 8621. I report the funds for FBAR purposes and all the income distributions, but 8621 is just too ridiculous. I'll happily risk the audit & any reassessment. YMMV.
[/QU
 

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Discussion Starter · #7 ·
wow seems like i'm maybe breaking my head for nothing. $10,000 fine threat AND failing to file them with 1040 or separately voids statute of limitations on that year's tax return.
I somehow was filing them until 2016 but likely completely wronng. Went overseas for a few years as a volunteer; didn't file since 2016 but didn't remember I needed to and accountant didn't support so completely forgot.
Do you file the f8938?
FBARs are easy.
Right now i'm working through never ending IRS free e-filing TurboTax - scared to death I wont be able to e-file in the end or that TurboTax will make me pay something.... and then it won't work and I'll have to start over form by form and mail in .. before 15-June deadline.
I started by trying to file online a form 4869 for extension - but got dumped into the tax return nstead.

Does anyone know if i just put the form 4968 in the regular mail before the 15-June iling deadline if that's enough?
All this and i don't expect even to pay anything - just being compliant. I didn't file in 2019 cuz income was <$10,000.

By the way, your comments are all most appreciated
 

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brthomas9 -- As long as your 4968 is postmarked before the due date, you're good Extensions | Internal Revenue Service (irs.gov) . Here in the States, a lot of Post Offices stay open, until midnight, on the due date, to hand stamp tax returns. At our main Post Office, there is always a big line, on tax day! Cheers, 255

P.S. As long as you put in "your best effort" in filing your returns, you'll be OK. Heck, every year, I read a survey of tax preparers (who were given a sample income tax scenario to complete) and only about 10% get it right.
 

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Discussion Starter · #9 ·
Thank you for the info and encouragement. I have been filling out online free irs linked TurboTax and it might blow up on me but i'm mostly done. oddly will need to send by mail the statements for f8949 but nothing else mentioned...

another quick question for US citizens in Canada - soooo, on the f8938 do we include RRSPs? Yes of course for the FBAR but couldnt find info on irs.gov or elsewhere.
 

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another quick question for US citizens in Canada - soooo, on the f8938 do we include RRSPs? Yes of course for the FBAR but couldnt find info on irs.gov or elsewhere.
I always include my RRSP holdings on 8938, with details in part 6. Before 2014 there was a different IRS form, but yes you are supposed to include them now on 8938.
 

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I'll just throw out there the usual warning that while US "expats" with strong US financial ties and/or lacking Canadian citizenship do need to be careful with this stuff, dual citizens of the "Accidental American" persuasion - of which there are a great many in Canada - can safely ignore any US tax filing requirements. Furthermore, Canadian banks will open accounts using a drivers license as identification, so even those born in the US can very easily avoid FATCA reporting by not voluntarily checking the little "I am resident of a foreign country for tax purposes" box on the application form.

PS for the mods - why does the little country flag automatically set itself by IP? For the record, I'm physically in Canada but I'm on a VPN to watch Eurosport in German.
 

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PS for the mods - why does the little country flag automatically set itself by IP? For the record, I'm physically in Canada but I'm on a VPN to watch Eurosport in German.
That's apparently how this new software works. We (i.e. the mods) have no control over it. But feel free to post something in the Support section if you want more information from the forum owners.
 

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That's apparently how this new software works. We (i.e. the mods) have no control over it. But feel free to post something in the Support section if you want more information from the forum owners.
I rather like the idea that forum readers think I'm living in the country where my computer pretends to be for TV purposes, but maybe I should mention it.
 

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Discussion Starter · #14 ·
Thank you for the info and encouragement. I have been filling out online free irs linked TurboTax and it worked well. I also attached a statement re Forms 8621 listing the different mutual funds, TFSAs, RESP from the statements, and then I attached a statement to the effect that we don't have sufficient information to complet the Form 8621, but that any income from those accounts is reported on the form 1040.
Thank you very much for your comments and ideas to improve best-effort compliance income reporting. Next stop, post office to ail in what apparently can only be e-filed by an accountant's office.
 
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