US investment accounts while moving to canada

[AjeyaGupta]

I can answer part of your questions. Having the US address is good. Because without it you would need someone in the US to receive mail regarding your investments, and the would have to sign a form to do so.even though you would still get the info in Canada.
If you have a financial planner in the US you should ask them for these answers because they are the expert. Remember the US dollar exchange to Canadian. Taxes in Canada will be based on the exchange rate for the year and you will pay provincial taxes and federal on on your money, but you will get credit for taxes paid in the US.
You will need a cross border tax accountant. You can’t cash your investments except a traditional ira unless you are on USA soil. You can get dividends but not cash the investments without being in the USA.

So essentially, I can continue to maintain my investments accounts and obtain dividends whenever applicable. Just that I can not actively invest in those accounts while i am living in Canada. Is this correct?

I'll dig deeper and find more information about investments and monthly contribution to my 401k account.

Thanks.

 

[Snowisland]

So essentially, I can continue to maintain my investments accounts and obtain dividends whenever applicable. Just that I can not actively invest in those accounts while i am living in Canada. Is this correct?

I'll dig deeper and find more information about investments and monthly contribution to my 401k account.

Thanks.

When I moved I was old enough that my investment days were over. Now I either take the dividends or wait until I can go back to the USA and get all my money. But the reason for the law about having to have a USA address and not doing transactions while out of the country had to do with trying to stop foreign investors. Your employer should be able to tell you if you can still contribute because they are the ones handling the payroll deductions.
Please post what you find out. I still like to learn. Thanks.

 

[gtgy2k1]

When I moved I was old enough that my investment days were over. Now I either take the dividends or wait until I can go back to the USA and get all my money. But the reason for the law about having to have a USA address and not doing transactions while out of the country had to do with trying to stop foreign investors. Your employer should be able to tell you if you can still contribute because they are the ones handling the payroll deductions.
Please post what you find out. I still like to learn. Thanks.

Hey Ajeya,
Did you find more information about this ?

 

[AjeyaGupta]

Hey Ajeya,
Did you find more information about this ?

Hi @gtgy2k1

I am looking at my investments / cash from the perspective of 4 different categories
1. Cash in Checking/Savings Account - These accounts are okay to have in USA
2. Company sponsored 401k / retirement account - This also seems to be okay to maintain.
3. HSA Account - I am still figuring this out
4. Personal Brokerage account (e.g. Robinhood / Vanguard / Fidelity / ....) - I am still digging into this. But, based on my initial survey, it looks like you can continue to maintain these accounts in USA, just that you cannot contribute to them (you can contribute to these accounts only if you are US Resident for tax purposes, which will be valid only if you pass the substantial presence test according to the IRS). I will keep you posted as and when I have more concrete information.

Feel free to add / correct anything that I have mentioned above.

Thanks!

 

[gtgy2k1]

Hi @gtgy2k1

I am looking at my investments / cash from the perspective of 4 different categories
1. Cash in Checking/Savings Account - These accounts are okay to have in USA
2. Company sponsored 401k / retirement account - This also seems to be okay to maintain.
3. HSA Account - I am still figuring this out
4. Personal Brokerage account (e.g. Robinhood / Vanguard / Fidelity / ....) - I am still digging into this. But, based on my initial survey, it looks like you can continue to maintain these accounts in USA, just that you cannot contribute to them (you can contribute to these accounts only if you are US Resident for tax purposes, which will be valid only if you pass the substantial presence test according to the IRS). I will keep you posted as and when I have more concrete information.

Feel free to add / correct anything that I have mentioned above.

Thanks!

Are you in Canada already or still planning to move?
I think you are probably correct on all accounts

 

[despairedh1b]

For those that can be continued to be maintained in the US, do we have to give a heads up to the Bank or anyone?

 

[harirajmohan]

For those that can be continued to be maintained in the US, do we have to give a heads up to the Bank or anyone?

No. Its my personal take.

 

[RaghuR]

Hi @gtgy2k1

I am looking at my investments / cash from the perspective of 4 different categories
1. Cash in Checking/Savings Account - These accounts are okay to have in USA
2. Company sponsored 401k / retirement account - This also seems to be okay to maintain.
3. HSA Account - I am still figuring this out
4. Personal Brokerage account (e.g. Robinhood / Vanguard / Fidelity / ....) - I am still digging into this. But, based on my initial survey, it looks like you can continue to maintain these accounts in USA, just that you cannot contribute to them (you can contribute to these accounts only if you are US Resident for tax purposes, which will be valid only if you pass the substantial presence test according to the IRS). I will keep you posted as and when I have more concrete information.

Feel free to add / correct anything that I have mentioned above.

Thanks!

Ajeya, were you able to figure out 3 & 4? It'll be helpful if you could share your experience.
Also, 401k investment is pre-tax so would that still be pre-tax or you end up paying taxes on them to Canadian gov? Looking fwd to hear from you.

 

[AjeyaGupta]

Ajeya, were you able to figure out 3 & 4? It'll be helpful if you could share your experience.
Also, 401k investment is pre-tax so would that still be pre-tax or you end up paying taxes on them to Canadian gov? Looking fwd to hear from you.

Hi,

3. Yes, HSA Contributions can still be made while being a resident of Canada. Just that, HSA debit card may not be accepted in Canada (well, it will be accepted, just that the HSA may require to pay taxes on the purchase)
4. Investment accounts
a. Robinhood: They are not okay if you move to Canada (even if you have a US address on file). In fact, they asked me to liquidate everything and close the Robinhood account before moving to Canada). An alternate to this is to use Charles and Schwab, they allow you to maintain an account if you have an US address on file
b. Vanguard - You can maintain an account, but cannot deposit anything
c. Personal Capital / Pershing: THey allow regular contributions and maitaining the account if you have US address on file

In all, you need to have an US address (at an minimum) to be able to atleast maintain an account.

Regarding 401k, I have Roth account, so I pay taxes (regular tax deduction to IRA) before I contribute to my 401k account. Hence, I am not sure how will the taxes work in your case (i.e. Pre-tax contribution)

Hope this helps.

Thank you.

 

[RaghuR]

Hi,

3. Yes, HSA Contributions can still be made while being a resident of Canada. Just that, HSA debit card may not be accepted in Canada (well, it will be accepted, just that the HSA may require to pay taxes on the purchase)
4. Investment accounts
a. Robinhood: They are not okay if you move to Canada (even if you have a US address on file). In fact, they asked me to liquidate everything and close the Robinhood account before moving to Canada). An alternate to this is to use Charles and Schwab, they allow you to maintain an account if you have an US address on file
b. Vanguard - You can maintain an account, but cannot deposit anything
c. Personal Capital / Pershing: THey allow regular contributions and maitaining the account if you have US address on file

In all, you need to have an US address (at an minimum) to be able to atleast maintain an account.

Regarding 401k, I have Roth account, so I pay taxes (regular tax deduction to IRA) before I contribute to my 401k account. Hence, I am not sure how will the taxes work in your case (i.e. Pre-tax contribution)

Hope this helps.

Thank you.

Thanks Ajeya
Regarding Robinhood, if you are maintaining residence in US I guess nothing changes so you can still continue to have account. correct me if I’m wrong

 

[AjeyaGupta]

Thanks Ajeya
Regarding Robinhood, if you are maintaining residence in US I guess nothing changes so you can still continue to have account. correct me if I’m wrong

Actually no. They explicitly said that if I move to Canada (even if I have US address), I will need to close my Robinhood account. They won't allow even maintaining a Robinhood account (forget investing). As I said, Charles and Schwab is a good alternative to Robinhood. They allow maintaining an account if you move to Canada and have US address on their file. Also, transition from Robinhood to C&S is pretty seamless (they would help to move your entire Robinhood profile to S&C).

 

[kunal1364]

Actually no. They explicitly said that if I move to Canada (even if I have US address), I will need to close my Robinhood account. They won't allow even maintaining a Robinhood account (forget investing). As I said, Charles and Schwab is a good alternative to Robinhood. They allow maintaining an account if you move to Canada and have US address on their file. Also, transition from Robinhood to C&S is pretty seamless (they would help to move your entire Robinhood profile to S&C).

Did you find any broker in Canada who can move your US stocks to Canada?
How can you maintain job in US being in Canada?

 

[swan0206]

Actually no. They explicitly said that if I move to Canada (even if I have US address), I will need to close my Robinhood account. They won't allow even maintaining a Robinhood account (forget investing). As I said, Charles and Schwab is a good alternative to Robinhood. They allow maintaining an account if you move to Canada and have US address on their file. Also, transition from Robinhood to C&S is pretty seamless (they would help to move your entire Robinhood profile to S&C).

What if someone has forgot to close the robinhood account. I do not have any stocks up there but didnt close the account yet. Moved Canada a while ago, if i close it now is it fine?? When you say they wont allow, who is that? Robinhood??

 

[AjeyaGupta]

What if someone has forgot to close the robinhood account. I do not have any stocks up there but didnt close the account yet. Moved Canada a while ago, if i close it now is it fine?? When you say they wont allow, who is that? Robinhood??

I dont know about that. The thing is that every US brokerage account wants an US mailing address on file, to send statements, tax forms etc (I understand all of these are available online too). The only difference between different brokerage accounts is if they'd allow you to maintain an account if you are living overseas

In case of Robinhood, I guess there is no way for them to know if you are in US or outside US. I asked them as a general inquiry if they would allow me to maintain a Robinhood account if I have US address on file, but live in Canada. They were absolutely not supportive of this. So if you dont tell them about your situation, I guess they would never come to know (as long as you have US address on file)

 

[AjeyaGupta]

Did you find any broker in Canada who can move your US stocks to Canada?
How can you maintain job in US being in Canada?

No, I did not find a broker to move funds from US account to Canadian based brokerage accounts. I am not even sure how will this work, especially considering that USD to CAD conversion would apply. The best way might be to sell your stocks/funds and invest that hard cash in Canadian based brokerage account, and buy US based ETFs through that.

"How can you maintain job in US being in Canada?" --> This is a very broad question. Do you have any specifics related to this they you'd like me to answer?