Episode 71: TFSA or Trouble? What Americans in Canada Need to Know

Should an American living in Canada hold a TFSA—or avoid it? Ask 10 accountants and you might get 15 different answers. That’s why this episode of Snowbirds Expat Radio brings in cross-border tax expert Christa Walkden from 49th Parallel Tax.

With nearly 30 years of experience in U.S. and Canadian taxation, Christa breaks down the complexities around Tax-Free Savings Accounts (TFSAs) for U.S. citizens in Canada. She explains the spectrum of filing positions, from the most conservative (treating the TFSA as a foreign trust with Form 3520 filings) to more practical approaches that rely on disclosure and income reporting.

Listeners will also hear:

• Why the IRS hasn’t clarified the TFSA’s status—and what that means for you.

• How Canadian mutual funds inside a TFSA create extra problems under U.S. PFIC rules.

• The pitfalls of transferring TFSAs into U.S.-owned firms (like capital gains surprises).

• Why collaboration between advisors, accountants, and immigration lawyers is critical.

• When it actually makes sense for Americans to keep a TFSA, depending on their other income and foreign tax credits.

Christa and Gerry also touch on the hope that a future treaty update could treat TFSAs the same way Canada treats Roth IRAs—finally bringing clarity for cross-border families.

Resources

📞 Learn more about Crista Walkden & 49th Parallel Tax: https://49ptax.ca/