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US-Canada Tax Questions / Tax implications and planning as new immigrant with US income
« Last post by zwz002 on October 09, 2018, 02:51:48 PM »

I landed earlier this year as a PR in Canada and started working shortly after that. I was an H1B in the US for 5 years and also own a few rental properties in the US as well. So since I moved to Canada this year, I know I'll have to file a Canadian tax return for this year and declare the income generated from US as foreign income. But what about my US tax return? I am not a US green card holder/passport but have passed substantial presence test when living in the US, so I've been filing as a resident alien. I'll still pass the substantial presence test this year. If I don't pass the substantial presence test next year, will I be filing a 1040-NR then? Are there additional things to look for during tax season? Please advise, thank you.
US-Canada Tax Questions / Re: SEP IRA upon arrival in Canada
« Last post by Phil Hogan, CPA, CA, CPA (Colorado) on September 17, 2018, 08:41:57 PM »
Hi Anne

While in the US anytime you can invest in a tax deferred vehicle while working is likely a good idea. When you move up to Canada you may consider moving the IRA and 401k to an RRSP or at least to an advisor that can manage cross border funds.

Will you be working when you come up to Canada?

US-Canada Tax Questions / SEP IRA upon arrival in Canada
« Last post by annecharlotte1959 on September 05, 2018, 05:50:40 PM »
I am in between jobs and need to decide what retirement investment vehicle will be best, should I decide to return to Canada. I am working the States with a green card. I am a Canadian citizen and my very well return to Canada later in life.
I have a Roth 401k from my previous employer - my contributions were matched dollar for dollar. I have set employment earning and
would like to open up a SEP IRA BUT AM VERY WORRITED THIS WILL POSE A TAX NIGHTMARE should I return to Canada in the future.
My new employer will not match contributions for any of the retirement plans I set up through the company. WHAT should I do with my current Roth 401k that is made up of employer and my contributions? Should I forget about an SEP IRA even though I would like the tax write off now (I am the only employee)?
US-Canada Tax Questions / Obamacare subsidy after moving to Canada
« Last post by Johnny on August 27, 2018, 10:16:33 AM »
I am moving to Canada this month from USA and won't be qualified for Canadian health insurance until a three month waiting period is over. I took a couple years off work and based on my income I have been receiving a subsidy for my Obamacare health insurance premiums.
My question is: Will my subsidy still kick in for the two months where Im no longer an American resident?
Any help is appreciated!
Hi there

It really depends on the type of income. In most cases you'll pay more tax in Canada on your US source income and then simply get a credit for any US tax you pay for US purposes. Therefore only really paying Canadian rates overall.

Rental income is just taxed at regular rates.

Hope that helps.

US-Canada Tax Questions / Re: Canadian taxes and LIRF
« Last post by Harvest on August 04, 2018, 11:13:06 AM »
Hi there! Yes I reported my US income on my 2016 and 2017 taxes and had to owe Canada money :( have not done my 2018 taxes yet. Now that I have been offered a full time job in the US, I do not have any foreseeable plans to return to Canada
Hi Phil,

Thanks so much for your reply, and my apologies on more questions as I am not very acquainted with cross border taxation.

When you say we need to file T1135 on all US investments, does that mean we will be paying for interests we receive on our retirement accounts and dividends through stocks? If so, is that just lumped in with total income or is it like the US where there is a lower rate for long term investment?

On the rentals also, is there a different tax rate or is everything just part of income and we pay income tax rate?

Thanks again!

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Hi Murasaki

A few things...

The 183 day rule may not apply to you necessarily as you will become a resident when you "move" to Canada and not when the 183 day is established. The 183 day rules usually applies to those "in and out" of the country and not new residents.

Generally speaking, once in Canada you'll report your worldwide income in both Canada and the US on each respective tax return. You'll get tax credits on respective income to ensure you don't pay tax on income twice.

You are correct, we tend not to depreciate rental properties for Canadian purposes which often results in some extra Canadian tax on US rental properties.

You'll also need to file T1135 for the rental properties and any other US investments, although you'll technically have an exemption from filing the first year.

That's really just a quick summary of your requirements as you'll potentially have much more to consider like FBAR filings etc.

US-Canada Tax Questions / Re: Canadian taxes and LIRF
« Last post by Phil Hogan, CPA, CA, CPA (Colorado) on July 31, 2018, 09:57:42 AM »
Hi Harvest

This will be a tricky one. You definitely don't want to file the NR73 with CRA as if they deem you to be a non-resident for that period the house sale would have been subject to non-resident withholding taxes and clearance certificate requirements.

Did you report your US income on your Canadian return for 2016 to 2018? Do you plan on moving back to Canada in the near term?

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