[homeinboca]

I had recently purchased some US stocks in my non-registered account. When I received a dividend payment, there was an amount withheld for tax. When filing next year, what are the implications of this? Will I need to fill a US tax return or can I include this in my Canadian tax returns?

Thanks for any advice.

 

[FrugalTrader]

You will not need to file a US return. The way it works is that US dividends are treated like interest. That is, it is taxed at your marginal tax rate. When filing your taxes, the tax withheld will go against the tax owed.

 

[Jon202]

Make sure your broker has a w-8BEN on file for you.

This will ensure only 15% is withheld, and not 30%.

On your tax return next year, you can claim a foreign tax withheld for a small credit. Foreign dividends are taxed as regular income.

 

[CanadianCapitalist]

I had recently purchased some US stocks in my non-registered account. When I received a dividend payment, there was an amount withheld for tax. When filing next year, what are the implications of this? Will I need to fill a US tax return or can I include this in my Canadian tax returns?

You don't have to file a US tax return. When you receive your T-slips at the end of the year, you'll find that the foreign tax deducted is listed. You get a tax credit for the foreign tax deducted.

Like Jon mentions, make sure your broker has you classified as a Canadian resident and that the US withholding taxes is 15%.

http://www.canadiancapitalist.com/check-your-withholding-tax/

 

[homeinboca]

Thanks for the feedback and info - appreciate the update.

 

[Franky Jr]

On a similiar note,
Investing in US equities outside of an rsp account I've read is not the preferred method.
Anyways, I was thinking about buying them inside a TFSA, I would still get hit with the withholding tax, but how big of a deal is it to pay the exchange fee the broker charges every time say a dividend is paid out? (as TFSA are in CAD funds I assume the broker will flip the USD dividend into CAD on the spot).
Lastly should it be everyone's goal to one day have all their money divided between there tfsa and rsp accounts and preferable have nearly no money in non registered investments?

Thanks

 

[leslie]

You evaluate that issue the same way you would evaluate the issue of US investments in RRSP. See http://www.retailinvestor.org/rrsp.html#USdollar