US/Canadian Taxes

[Tullysgirl]

Looking for resources/previous threads on how to avoid the double income taxes.

2013 will be my first year making CA income.....

Thanks!

 

[scylla]

If you're an American living in Canada - then you must file in both countries. You won't be double taxed because you will declare the tax you've paid in the first country on the second country's return.

My husband files his income tax return in Canada first and then files his US return (in his US return he declares the tax he has already paid in Canada). Because Canada has a higher tax rate, he never ends up owing anything on his US return. If for some reason his Canadian taxation rate was lower than his US rate, then he would end up paying the different to the US (IRS).

 

[keesio]

There are a lot of "gotchas" regarding US taxes to keep in mind. So unless your taxes are extremely simple, I suggest an accountant familiar with US tax laws. For example, you need to pay the income earned in a Canadian TFSA. And the IRS considers it a trust (though there is a lot of back and forth on this) and you need to file a 3520/3520a. Then there are all the various forms for RRSP and RSP accounts. If you make an RRSP contribution, you need to pay US taxes on that since you don't pay any Canadian taxes. Then there is the separate forms you need to the US Treasury completely separate from the forms to the IRS. And any work you are doing on business in the US (even on behalf of a Canadian employer) is considered US sourced income and subject to double taxes. the tax credit you get can help offset most of this but there have been times when I did have to pay.

An accountant who knows what they are doing is well worth it...

 

[Isometry]

Any advice on actually finding an accountant that does US taxes?

 

[keesio]

Where are you located? I live in Toronto and can recommend a few in the area.

 

[Isometry]

I'm in Edmonton, unfortunately. It was a huge pain to file my taxes last year.

 

[keesio]

I'm sure you can find someone in your area. Canadians who need to deal with US taxes is common enough that in every major city there should be someone.