Employed in US after PR; tax questions

[leslieann]

Hi, everyone.

Well, I finally got the PPR and now I am wondering about a strategic time to land. My visa will expire December 7, 2007, so it has to be in this tax year. I spoke with Canada Revenue Agency yesterday. I will be keeping my job in the US. I will have to file a tax form in the US (because that is where my money is withheld) and in Canada (because that will be my tax residence). Canadian filers get a tax credit on taxes paid in foreign countries, but I am guessing that I will still owe Canadian income tax even after paying the US tax and getting the credit because the Canadian tax rate is higher.

The question is whether I should delay landing as long as possible to minimize the tax bite, since I won't be leaving my US job until May 2008 (I am under contract). Or would this make no difference? I am envisioning that this next academic year is going to be very expensive for me, maintaining two homes plus paying additional taxes. Ugh.

Does anyone know of a resource on this situation that could help me? I am also seeking an accountant who can give me some advice.

Thanks in advance.

Leslie Ann

 

[PMM]

Hi

Hi, everyone.

Well, I finally got the PPR and now I am wondering about a strategic time to land. My visa will expire December 7, 2007, so it has to be in this tax year. I spoke with Canada Revenue Agency yesterday. I will be keeping my job in the US. I will have to file a tax form in the US (because that is where my money is withheld) and in Canada (because that will be my tax residence). Canadian filers get a tax credit on taxes paid in foreign countries, but I am guessing that I will still owe Canadian income tax even after paying the US tax and getting the credit because the Canadian tax rate is higher.

The question is whether I should delay landing as long as possible to minimize the tax bite, since I won't be leaving my US job until May 2008 (I am under contract). Or would this make no difference? I am envisioning that this next academic year is going to be very expensive for me, maintaining two homes plus paying additional taxes. Ugh.

Does anyone know of a resource on this situation that could help me? I am also seeking an accountant who can give me some advice.

Thanks in advance.

Leslie Ann

If you just "land" and then return to the US to continue working, you would not be considered a canadian resident for taxation purposes and would not have to file a Canadian tax return until you actually started living in Canada. http://www.cra-arc.gc.ca/tax/nonresidents/individuals/newcomer-e.html

PMM

 

[leslieann]

Thanks, PMM. I will check that out.

It does seem that my situation is a bit complicated; I own a house and have a domestic partner in Canada, and I plan to open a practice there (I am a psychotherapist) even before my academic appointment expires. My tax residence really WILL be in Canada; I am trying to get the practice started before I stop having a regular salary but I am beginning to see that my ideal picture is a bit flawed.

Leslie Ann