Date: Monday
June 18,
2007
Time: 12:45 PM -0400
QUESTION:
I am a U.S. citizen. If I move to Canada to live and work there as a Canadian permanent resident (living with my Canadian girlfriend), do I pay both U.S. and Canadian Taxes?
-------------------------------------------------------------------Time: 12:45 PM -0400
QUESTION:
I am a U.S. citizen. If I move to Canada to live and work there as a Canadian permanent resident (living with my Canadian girlfriend), do I pay both U.S. and Canadian Taxes?
david ingram replies:
Congratulations, 'You' get the only question answered today of about 60 I have received.
If you live in Canada and are a US citizen, you are taxed first in the country that is the source of the money. Therefoe, if you live and work in Canda, you are taxed frist in Canda on your wages and then you have to report them again on your US 1040 and claim a foreign tax credit to avoid US tax.
If while living here, you have somemutual funds or bank deposits or a rental house you left in teh US, the US gets the tax first and then you report the income again on your Canadian return and claim a foreign tax credit in CANADA for the tax paid to the US.
This is not double taxation but you do have to file returns for both countries.
GOTO www.centa.com and read the October 1995 newsletter in the top left hand box and then read the US/Canada Taxation section in the second box down on the right hand side.
And, if you have any Caandian Accounts when you get here, if the total is over $10,000 US at any time in a year, you have to fill in form TDF 90-22.1 for each account. If you happen to start a Canadian Corporation, you have to fill in form 5471. If you buy a Canadian RRSP, you need to fill in form 8891. You can find allthese forms under forms and publications at www.irs.gov
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If an email is not answered in 24 to 36 hours, it is lost in space. You will have to phone to make an appointment. Gillian Bryan generally accepts appointment requests for me between 10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los Angeles) time at (604) 980-0321
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
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comment. Nothing in this message is or should be construed as advice
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David Ingram gives expert income
tax & 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 $400 for 15 minutes to 50
minutes (professional hour). Please note that GST is added if product remains in
Canada or a phone consultation is in Canada.
This is not intended to be definitive but in
general I am quoting $800 to $2,800 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two
interest slips and you lived in one country only - no self employment or rentals
or capital gains - you did not move into or out of the country in this
year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no
rental
$1,200 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.
$1,500 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
$1,600 would be for two people with income from two countries
$2,800 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 $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely
$450
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 $800 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.
Just a guideline not etched in
stone.
This from "ask an income trusts tax and immigration expert"
from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily
basis with expatriate tax returns with multi jurisdictional cross and
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