CHOOSING A DUAL COUNTRY ACCOUNTANT - Gary Gauvin - Steve Peters -
QUESTION: What should I look for in finding an accountant who can do my Canada/US taxes? I'm a Canadian working in the US under a TN visa. Thanks!--------------------------------------
david ingram replies:
1. Pick your accountant as soon as possible. Pick one that advertise that they are dual country accountants. I am giving a list after this.
2. Do not expect a 'free exploratory visit. We do not have enough time and anyone any good in the business was turning people down in April and June.
If you want to talk to me first, I call that a tax consultation. I charge a minimum of $450.00 for your exploratory visit or consultation. If you then decide to hire me to do the returns, do not ask if I credit the consultation toward the preparation fee. The answer is NO. If you are doing a consultation, do it in November when there is time to sort things out before Dec 31st.
You can get a free bit of consultation by just hiring us to do the return and asking questions while it is being prepared.
3. Here are some questions to ask.
On the US side:
a. What is a Dual Status Return? can a dual status return be A JOINT RETURN? If they have to look it up, do NOT deal with them.
b. What is a dual status statement?
c. If you have rented your house out in Canada, what is the difference in depreciation methods.
d. What is form 8891 -
e. What is form TDF 90-22.1 - What is the penalty
f. When do you have to file Schedule E? Hint, if you have 'any' foreign financial account in any country, you have to file schedule B even if there were no earnings on that account and answer questions 7 and 8 on the bottom.
g. If you have a corporation on either side of the border, ask about forms 5471 and 5472.
On the Canadian Side
1. What is a departing Canada return?
2. What is a factual resident?
3. What is a deemed resident?
4. What is form T1135? (what is the fine for not filing on time) If they have to look it up? You do not want to deal with them.
5. What is form T1161? What is the penalty for not filing on time.
6. What is form T1243?
7. What is form T1244?
8. How is your house taxed when you move back in if you return to Canada?
9. Does section 45(2) apply (No, it does not it can NOT be used if you are a non-resident). How does Section 45(3) apply (It does not if you claim CCA while out of the country)
10. How long is your Provincial medical coverage good for?
11. What happens to your Home Buyers Plan when you depart Canada. (it is all taxable on that final return if not paid back within 60 days of leaving the country.).
This should help. Just remember. If a corporation is involved, you need someone who understands the question and can answer each one without 'research' or 'looking it up'.
If no corporations are involved, they do not need to know about forms 5471 and 5472.
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If you are on a TN or H visa, this should be your bill.
If you are on an L visa, your company should pick up the tab.
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The following are capable of looking after your returns if you do not want to send them here.
For the record, I have never met or even talked to Kevin Nightingale, Mark Serbinski,Steve Peters or Len Vandenberg that I know of or remember. I have met and talked to Brad Howland in his home office in Victoria. . Sonia Clarke, Steve Katz and Gary Gauvin all worked with me in my offices in the past.
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The following was the answer to someone who was in need of an accountant to look after a cross border corporation.
HINT one.
You should only use a December 31 year end for the Canadian company because the US 5471 forms will be much cheaper if you are set up as a Dec 31st year end. By the way, failure to file the 5471 forms is a minimum penalty of $10,000 for the first 90 days and $10,000 every 30 days thereafter to a maximum of $50,000 a year per shareholder of the Canadian company.
In addition the Canadian Company will also likely end up with more than $10,000 in its account at some time and that necessitates the filing of form TDF 90-22.1 which has a minimum fine of $10,000 to a maximum fine of $500,000 plus up to 5 years in jail for failure to file.
Hint two.
When you are trying to find an accountant on either side of the border, start off by asking them what the rules are for when a 5471 and a TDF 90-22.1 have to be filed. If they can not answer immediately, then you do not want to be their guinea pig. Now, it will be likely that the person who answers the phone does not know so do not ask them so that they can write it down, say no one is available and then have someone else phone you back after getting a chance to look up the answers.
Save the questions for the actual tax person.
Hint three.
I would forget about the corporation unless you know it is going to make you a fortune. It 'reallllly' complicates your life! there is no way that being the president of a non-resident CANADIAN corporation is worth the hassles unless it is making you $100,000 a year or more in my opinion.
But you still have the corporation.
Some hints to get them done. Who could look after you?
Gary Gauvin is absolutely qualified to deal with you. He is an old business partner of mine from Ottawa. He now practices outside of Dallas Texas as a one or 1 1/2 person office. If you deal with Gary, you will deal with Gary. He is a US enrolled agent. You can find his website easily. Type - income Tax Expert - into
google. Gary will come up as number one or two. Why, because he is. If I am looking for a first or second opinion, I call Gary. Disadvantage -
Gary is a one person office. Advantage - You will always get to talk to Gary.
Gary likes corporations. I and my three associates do not like them. I like dealing with individuals who deal cross-border withOUT corporations.
OR KPMG in Vancouver. The last time I checked they had 22 people in their US/Canada department. call (604) 691-3025. Advantage - Lots of Backup. Disadvantage - It will be hard to get the same person to deal with you three times in a row.
OR Steve Peters with KPMG in Halifax at (902) 492-6011
OR Kevin Nightingale in Toronto at (416) 733-9595
OR Mark Serbinski in Toronto at (416) 733-0300
OR Len Vandenberg with BDO Dunwoody in Kelowna, BC. at (250) 763-7600
OR Steve Katz in Vancouver at (604) 732-1515
OR Sonja Clark in West Vancouver at (604) 913-3376
OR Brad Howland in Victoria at (250) 598-6258
Whoever you choose, you would likely do well to consult with me for one or two hours a year. If I have a suggestion, it will be worth it. If I can't come up with anything, you will know that what you are doing is likely the best track. I will compare it to my dentist. When I went in the fall of 2005, I ended up with $16,000 to $18,000 of dental bills, a bunch of pain, and a lot of nice new caps, etc.
When I went for an inspection on Jan 29, 2008, he could not find anything wrong except that I was not flossing. Which one did i appreciate more?
Well both - the first time was expensive but dealt with years of neglect. The second said I am on the right track. (and of course, it would not be right to leave it three. - a month later I was in total pain with some sort of abscess and Dr Ed Clarke fixed it 'just like that' but it took three visits. One to do a quick fix. Two to do a root canal through a cap and three to seal it in forever.
Good luck with your tax return AND your teeth and that is my last hint.
You would not go to the dentist without your teeth. Do not leave stuff behind when you visit your tax consultant.
Take your copies AND the assessments. Better to have a suitcase full of stuff you might need and do not then to leave stuff behind. Not taking it all the first time can end you up costing you twice as much for our fees. All we have to sell is our time.
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SUGGESTED PRICE GUIDELINES - May 17,
2008
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.
$1,700 would be for two people with income from two countries
Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable. In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years. We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund.
Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files. As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files. It can take us a valuable hour or more to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance.
david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax service help.
pert US Canada Canadian American
Mexican Income Tax service and
help.
David Ingram gives expert income
tax service & immigration help to non-resident Americans &
Canadians from New York to California to Mexico family,
estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence &
authority.
Phone
consultations are $450 for 15 minutes to 50 minutes (professional hour). Please
note that GST is added if product remains in Canada or is to be returned to
Canada or a phone consultation is in Canada. ($472.50 with GST for in person or
if you are on the telephone in Canada) expert US Canada Canadian American Mexican Income
Tax service and help.
This is not intended to be definitive but in
general I am quoting $900 to $3,000 for a dual country tax
return.
$900 would be one T4 slip one W2 slip one or two
interest slips and you lived in one country only (but were filing both
countries) - no self employment or rentals or capital gains - you did not move
into or out of the country in this year.
$1,200 would be the same with one rental
$1,300 would be the same with one business no
rental
$1,300 would be the minimum with a move in or out
of the country. These are complicated because of the back and forth foreign tax
credits. - The IRS says a foreign tax credit takes 1 hour and 53
minutes.
$1,600 would be the minimum with a rental or two in
the country you do not live in or a rental and a business and foreign tax
credits no move in or out
$1,700 would be for two people with income from two countries
$3,000 would be all of the above and you moved in
and out of the country.
This is just a guideline for US / Canadian
returns
We will still prepare
Canadian only (lives in Canada, no US connection period) with two or
three slips and no capital gains, etc. for $200.00 up.
However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms,
expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or
T5008 or T101 --- Income trusts with amounts in box 42 are an even larger
problem and will be more expensive. - i.e. 20
information slips will be at least $350.00
With a Rental for $400, two or three rentals for
$550 to $700 (i.e. $150 per rental) First year Rental - plus
$250.
A Business for $400 - Rental and business likely
$550 to $700
And an American only (lives in the US with no
Canadian income or filing period) with about the same things in the same range
with a little bit more if there is a state return.
Moving in or out of the country or part year
earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for the first and $25.00
each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00
each.
18 RRSPs would be $900.00 - (maybe amalgamate a
couple)
Capital gains *sales) are likely $50.00 for
the first and $20.00 each after that.
Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable. In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years. We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund.
Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files. As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files. It can take us a valuable hour or more to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance.
This is a guideline not etched
in stone. If you do your own TDF-90 forms, it
is to your advantage. However, if we put them in the first year, the computer
carries them forward beautifully.
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