Tax issues for Canadian beneficiaries of US estate Question Hi Phil, I came across one of your articles and your email. I am wondering if you would be willing to consult on what I think might be, to you, a fairly straightforward question regarding withholding rates on distributions from a US estate and Canadian beneficiaries. …
Moving to Canada with LLC and IRA – lots of tax questions Question Hi Mr. Hogan Thank you for taking the time to answer my questions. First let me give you a little background information. I am a dual citizen currently living in the state of Vermont. I plan to move to BC at this…
My daughter leaving Canada – tax implications? Question Phil, I saw your website and thought I would run this by you. I actually have a bit of a tax background, but my daughter’s situation is new to me. My daughter lived in Ontario for a few years and became a CA permanent resident. In February…
Giving up green card, investment accounts, W8 and HSA Key Points The individual recently renounced U.S. permanent residency and established Canadian tax residency in 2022. They maintain U.S.-based retirement and savings accounts, with concerns about updating their address and filing a W-8BEN form. They seek advice on managing a Roth IRA, including filing an election…
Moving from California to Victoria – Need help planning! Key Points The couple is preparing to move from California to Victoria, BC, with a focus on financial planning. They need guidance on converting a 401(k) to an IRA and potentially creating a ROTH IRA. Reviewing and simplifying investment accounts before moving is crucial to avoid…
Why it’s a bad idea to transfer your IRA to your RRSP Executive Summary IRAs are tax-advantaged U.S. retirement accounts with different tax implications in Canada. Canadian residents, with or without U.S. citizenship, can own U.S. IRAs, but specialized management is recommended. IRA withdrawals are taxed differently for Canadians based on their U.S. tax status….
Do Canadians Need to File US Estate Tax Returns? Key Points Canadians may need to file a U.S. estate tax return if their worldwide estate exceeds the U.S. filing threshold. The U.S. estate tax applies to non-resident aliens holding U.S.-situs assets, such as real estate or stocks. There are specific exemptions and credits available under…
What you need to know about the new RMD rules Key Points The age for Required Minimum Distributions (RMDs) has been raised to 73, starting in 2023. Failure to take an RMD by the deadline may result in a 25% penalty on the amount not withdrawn. Roth IRAs are exempt from RMDs during the owner’s…
California residents with Canadian RRSP – Need tax help! Key Points California residents with Canadian RRSPs must navigate complex U.S. and state tax rules. The U.S. requires annual reporting of RRSPs on IRS forms to avoid penalties. California does not recognize RRSP tax deferral, leading to potential double taxation. Proper planning is essential to minimize…
Friend fined $10,000 for late T1135 filing Key Points A $10,000 fine was imposed for late filing of the T1135 form, which reports foreign assets. The T1135 form is mandatory for Canadians with foreign property exceeding CAD 100,000. Failure to file the T1135 on time can result in significant penalties, even if no tax is…
Tax on US Pension/retirement funds in Ontario, Canada Key Points U.S. pension and retirement funds are generally taxable in both the U.S. and Canada. The Canada-U.S. tax treaty helps avoid double taxation by allowing tax credits for taxes paid to the other country. It’s important to properly file and report U.S. pension income on Canadian…
Help please. I have inherited a U.S. traditional IRA (I am Canadian, living in Canada) Key Points Inheriting a U.S. Traditional IRA as a Canadian resident involves complex tax considerations in both countries. The Canada-U.S. tax treaty allows for tax deferral but requires careful planning to avoid double taxation. Distributions from an inherited IRA are…
ROTH IRA for Canadians and Newcomers to Canada Key Points Roth IRAs offer tax-free growth and withdrawals in the U.S., but Canadians face unique tax considerations. The Canada-U.S. tax treaty may protect Roth IRA earnings from Canadian taxation if handled properly. Reporting a Roth IRA on Canadian tax returns is essential to avoid penalties and…
How to File US Tax Returns in Canada (Ultimate Guide updated for 2023) Key Points U.S. citizens and green card holders living in Canada must file U.S. tax returns annually, regardless of residency. The Foreign Earned Income Exclusion and Foreign Tax Credit can help avoid double taxation on income earned in Canada. Filing U.S. tax…
Moving to Canada from Florida – Should I keep our investments with our US broker? Key Points Moving to Canada from Florida requires careful consideration of whether to keep investments with a U.S. broker. U.S. brokers may face restrictions in managing accounts for Canadian residents, potentially limiting investment options. Keeping investments with a U.S. broker…
How to get an ITIN for a US investment account as a Canadian? Key Points Canadians needing an ITIN for a U.S. investment account must submit IRS Form W-7 with supporting documents. An ITIN is required for Canadians who do not qualify for a Social Security Number but need to file U.S. tax returns. Properly…
Tax withholdings on RRSP withdrawal to Italy Key Points RRSP withdrawals by Canadian residents moving to Italy are subject to a 25% withholding tax by Canada. The Canada-Italy tax treaty may reduce the withholding tax on RRSP withdrawals under certain conditions. Properly reporting RRSP withdrawals on both Canadian and Italian tax returns is essential to…
Moving to BC, what to do with investments and pending retirement? Key Points Moving to British Columbia requires reviewing your investment strategy to align with Canadian tax laws. Transferring U.S.-based investments to Canadian accounts may trigger capital gains taxes and other implications. Retirement planning should consider the differences in tax treatment between the U.S. and…
US Social Security Payments to Canadian Key Points U.S. Social Security payments to Canadian residents are subject to a 25.5% withholding tax by the IRS. The Canada-U.S. tax treaty can reduce the withholding tax on Social Security payments to 15% for Canadian residents. Social Security benefits must be reported on Canadian tax returns and may…
Does the Tax-Free First Home Savings Account (FHSA) work for Americans in Canada? Key Points The Tax-Free First Home Savings Account (FHSA) offers Canadian residents tax-free savings for their first home purchase. U.S. citizens in Canada may face U.S. tax reporting and potential taxation on FHSA contributions and earnings. The FHSA is not recognized under…
Moving to Vancouver from the US, need help with investments and future inheritance Key Points Moving to Vancouver from the U.S. requires careful planning to manage investments and future inheritances under Canadian tax laws. U.S.-based investments may face restrictions in Canada, necessitating a review of your investment strategy. Inherited assets from the U.S. could trigger…
Moving to Canada? Make this mistake and you might pay Canadian tax on stock losses Key Points Moving to Canada without proper planning can result in Canadian tax on stock losses due to differences in tax rules. Canada does not recognize stock losses incurred before becoming a resident, leading to potential tax liabilities. Failure to…
Meeting the substantial presence test and form 8840 Key Points The Substantial Presence Test determines if non-U.S. citizens are considered U.S. tax residents based on their physical presence in the U.S. Form 8840, the Closer Connection Exception Statement, allows individuals to claim a closer connection to another country, avoiding U.S. tax residency. Meeting the Substantial…
US citizen living in Canada and inheritance? Key Points U.S. citizens living in Canada must navigate complex tax implications when receiving an inheritance from the U.S. Inheritances are generally not taxable in the U.S., but income generated from inherited assets may be subject to U.S. and Canadian taxes. The Canada-U.S. tax treaty can help avoid…
Exclusive Canadian Immigration Webinar featuring Elizabeth Long Hi everyone I’m excited to announce our very first podcast guest. On November 17th I’ll be hosting a webinar with Elizabeth Long of Long Mangalji to discuss various Canadian immigration issues and strategies. Elizabeth has extensive experience in Canadian immigration strategies and I look forward to discussing these…
Moving to Canada with ROTH IRA, IRA and US investments at Vanguard Key Points Moving to Canada with a Roth IRA or traditional IRA requires careful planning to avoid potential tax issues in both countries. Canadian residents must report U.S.-based investments, including those at Vanguard, on their Canadian tax returns. The Canada-U.S. tax treaty may…
Do I need to file in the US for a Canadian business? Key Points U.S. citizens or residents with a Canadian business may need to file U.S. tax returns, even if the business is based in Canada. Reporting requirements include filing forms like the FBAR and Form 5471 for foreign corporations owned by U.S. persons….
Canadian tax on US principal residence sale? Key Points Canadians selling a U.S. principal residence may be subject to Canadian tax on the capital gain. The U.S. may also tax the sale, but the Canada-U.S. tax treaty can help avoid double taxation. The principal residence exemption in Canada can reduce or eliminate Canadian tax on…
American Expat Small-Business Owner Living in Canada – 5471 issues Key Points American expat small business owners in Canada may need to file Form 5471 to report their foreign corporation to the IRS. Failure to file Form 5471 can result in significant penalties, even if no tax is owed. Proper classification of the Canadian corporation…
Gifting Canadian RRSP to Children Key Points Gifting a Canadian RRSP to your children is not allowed, as RRSPs cannot be transferred during your lifetime without triggering taxes. Withdrawals from an RRSP are fully taxable as income, making direct gifts of RRSP funds costly for the giver. Upon the holder’s death, RRSPs can be transferred…
Help with cross-border investment questions Key Points Cross-border investments between the U.S. and Canada involve complex tax and regulatory considerations that require careful planning. Americans living in Canada need to navigate both U.S. and Canadian tax laws, which can impact investment strategies and returns. Common cross-border investment issues include reporting requirements, tax treaties, and the…
Receiving a large inheritance – IRA and investments Key Points Receiving a large inheritance, including IRAs and investments, involves complex tax implications in both the U.S. and Canada. Inherited IRAs have specific rules for distributions, which may trigger taxes in both countries if not handled correctly. Properly managing the timing and method of withdrawing from…
Moving to Canada from Texas with ROTH IRA, Investments and Living Trust Key Points Moving to Canada from Texas with a Roth IRA requires careful planning to avoid Canadian tax on future distributions. Roth IRA investments may continue to grow tax-free in Canada, but proper reporting to the CRA is essential. A U.S. living trust…
US streamline tax return catch up and inherited IRA Key Points The U.S. Streamlined Filing Compliance Procedures allow Americans abroad to catch up on missed tax returns without severe penalties. Inherited IRAs require careful handling to ensure compliance with both U.S. and Canadian tax laws. Timely and accurate reporting of inherited IRAs can prevent unexpected…
Sale of Thailand property by Canadian Key Points The sale of property in Thailand by a Canadian resident is subject to both Thai and Canadian tax laws. Capital gains from the sale may be taxable in Canada, even if taxes were paid in Thailand. The Canada-Thailand tax treaty can help prevent double taxation, but proper…
What tax filings should you expect your first year in Canada? Key Points Your first year in Canada involves filing both Canadian and possibly U.S. tax returns if you’re a U.S. citizen or resident. Canadian tax filings will include reporting worldwide income, with credits available for taxes paid to other countries. New residents must file…
Should I sell all my investments before moving to Canada? Key Points Selling all investments before moving to Canada may trigger capital gains taxes in your current country of residence. Canada imposes tax on worldwide income, including gains on investments sold after becoming a resident. Maintaining certain investments might be beneficial, but they must be…
Question about Capital Gains taxes by IRS on Canadian property Key Points U.S. citizens are subject to IRS capital gains tax on the sale of Canadian property, even if it’s their principal residence. The Canada-U.S. tax treaty may provide relief to avoid double taxation, but proper filing is crucial. Capital gains on Canadian property must…
What should we do with our IRA and RRSP when we move to Canada? Key Points Managing IRAs and RRSPs after moving to Canada requires careful consideration of cross-border tax implications. IRAs can continue to grow tax-deferred, but withdrawals may be taxed in both the U.S. and Canada. RRSPs are recognized by the U.S. for…
Moving to Canada with Trusts, IRAs and Real estate issues Key Points Moving to Canada with trusts, IRAs, and real estate involves complex tax considerations in both the U.S. and Canada. Trusts may be subject to different tax treatments in Canada, potentially leading to unexpected tax liabilities. IRAs can continue to grow tax-deferred, but distributions…
Moved up to Canada with 401k, investments and LLC business assets Key Points Moving to Canada with 401(k) investments and LLC business assets requires careful cross-border tax planning. 401(k) plans can continue to grow tax-deferred, but withdrawals will be taxed in both the U.S. and Canada. LLC business assets may be treated differently under Canadian…
How to correct under or over withholdings on US IRA or pension payments Whether you’re a US citizen or a non-resident Alien US custodians are required to withhold US tax on payments of IRA and other related pensions to Canadian residents. Under the Canada-US income tax treaty non-residents of the US are liable for a…
My advisors is telling me to withdraw my IRA? Question Hi Phil, I’m a member of the Facebook page. Maybe you can help me with some planning I’m trying to do for the coming year. I moved to Canada last year and my plan is to remain in Canada permanently. The only thing left in…
California and Canadian tax residency issues Question Phil, Saw your website and thought I would run this by you. I actually have a bit of a tax background but my son’s situation is new to me. My son lived in Ontario for a few years and became a CA permanent resident. During February 2021, he…
Moving from Thailand to BC Question Hi Phil, My name is XXXXX. Thank you for your emails. I was born in Vancouver, BC in 1955 to UK parents who moved to Washington DC in 1967 to work. After high school and a BA degree on the East coast, I completed 2 masters degrees at the…
Moving out of Canada – Tax issues Question Hello Phil Thanks for your quick reply. Just to clarify, my intention is to fully retire by 2023 (as in nothing but pension income) and live in the home that my husband and I purchased in Washington IF everything goes according to plan and I am awarded…
Canadian inherited a US trust containing investments Question Hi Phil I’m planning to book a consultation with you shortly for my questions below: I inherited a trust last year that I need help with. I think I received bad advice early last year and need to get proper advice on the trust given how many…
How are US pensions taxed in Canada Question I moved back to Canada a few years ago and will be starting to draw on my US pension in the coming months. How will my US pension be taxed in Canada? Answer Hi, thanks for your question, however considering I don’t know much about your situation…
CRA Foreign tax credit review and US capital gains distribution Question Hi Phil I follow you on social media and one day would love to be one of your clients once I can afford the extra tax accounting costs. In the meantime I wonder if you can help me with a tax problem I’m having….
American in Canada Selling Their Home As Canadian housing prices have risen significantly over the last few years the tax consequences of selling your primary home for both Canadian and US purpose can be significant. We will discuss below the main cross-border tax consequences of selling your principal residence and how to potential reduce any…