What is an RRSP and How is it Taxed Under the United States- Canada Income Tax Treaty

What is an RRSP and How is it Taxed Under the United States- Canada Income Tax Treaty

Tax Treaty
By Anthony DiosdiThe Canadian diaspora in the United States comprises approximately 3.1 million individuals who were either born in Canada or reported Canadian ancestry. Many of these individuals have Canadian registered retirement accounts or (“RRSPs”). An RRSP is a retirement savings and investing vehicle for employees and self-employed individuals in Canada. Under Canadian tax law, money that is placed into an RRSP grows tax-free until it is withdrawn from the account. An RRSP is similar to a U.S. 401(k) plan. There are a number of retirement plans available to Canadian residents to save for retirement. These plans provide tax deferral benefits and are intended to promote savings for retirements. Some common Canadian retirement plans are RRSPs, registered retirement income funds (“RRIFs”), tax-free savings accounts (“TFSAs”), registered education savings plans (“RDSPs”),…
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