10 Things to Know Before Moving to Canada from the US

cross border financial planner

1. US Citizens File Taxes Even When They Live Outside the US

US citizens moving to Canada will still be required to file US taxes even though they no longer reside in the US. Tax filings will be required based upon their US citizenship rather than traditional physical residency.

In addition to regular 1040 income tax returns, US citizens living in Canada are subject to additional foreign reporting requirements such as FBAR forms (reporting of your Canadian and non-US financial accounts). Penalties for late filing of these forms can be as high as $10,000, therefore it is highly advisable that you seek out a knowledgeable tax professional to help you navigate your cross border tax filings.

Not only do US citizens need to continue to file US 1040 income tax returns, but they will also need to ensure additional foreign reporting forms are completed. Engaging an experienced cross border tax professional will be very important.

Also, note that when exiting the US you may need to file a final exit tax return for any State you will no longer be a tax resident of.

2. You Won’t Need to Pay Canadian Tax on Accumulated Gains to Canada

When you become a tax resident of Canada your previous gains accumulated before you entered are protected from Canadian tax. Technically speaking, the adjusted cost basis of your investments and property is increased to the fair market value at the date of your entry.

Proper tax planning is often warranted to ensure investments and real property are sold in a tax-efficient manner either before or after entering Canada.

3. You May Not Be Able to Keep Your US Investments While in Canada

Non-residents of the US are not legally allowed to maintain non-registered (non-retirement accounts) accounts in the US assuming their financial advisors do not have a Canadian investment license. Although, as a US citizen, you are still required to file US taxes, you are considered a non-resident of the US for purposes of opening or maintain a US investment account.

Note however that accounts such as IRAs and 401k can still be maintained by Canadian residents.

A review of existing life insurance plans and investments is an important task as life insurance products can be treated very differently between Canada and the US. Reviewing these plans before entering Canada will allow you to properly mitigate any negative issues regarding the plans going forward.

Discussing your asset mix and related investment structure with an investment specialist is highly advisable before you enter Canada to ensure you don’t run into any unwanted surprises down the road.

4. You May Want to Liquidate Some Assets Before you Enter Canada

As discussed above it may be advantageous to liquidate some of your assets before entering Canada. Tax and investment planning before you enter Canada becomes extremely important as you have fewer options available to you once you become a tax resident of Canada.

For example, specific investments like US municipal bonds that are not taxable for US purposes, but are taxable for Canadian purposes, can be sold as they will hold very little tax advantage in Canada.

You may also consider selling any investments with accrued losses to ensure you don’t run into a situation where you pay Canadian tax on investments that are in a historical loss position for US purposes.

Reviewing the potential sale of your US principal residence will be important to ensure you don’t end up paying Canadian tax on an eventual sale. In cases where you are not able to sell your US principal residence before entering Canada ensure you sell the property within 2 years of entry to maintain your US principal residence exemption.

ROTH IRA transfer strategies can also be beneficial for those with anticipated lower incomes in the year before the move. For example, transferring some or all of your traditional IRA to a ROTH IRA before moving to Canada can save a significant amount of future Canadian tax if structure properly.

5. You May Want to Review Your Investments Before Entering Canada

Having a competent cross border tax and financial planner review your investments before you enter is necessary to ensure all opportunities and pitfalls are considered. Once you become a resident of Canada some planning opportunities become unavailable.

As Canadian income tax rules do not allow for joint tax filings, in some cases it makes sense to transfer investment assets to a spouse to ensure investment income can be equalized between both spouses for Canadian tax purposes.

Certain dependent educational plans like 529(b) plans should also be reviewed to ensure they can be used for Canadian universities. In most cases 529(b) plans will be available for Canadian post-secondary education, however, the income earned within these plans will be subject to Canadian tax once you become a resident of Canada.

I speak to many newcomers to Canada that have failed to contact a professional before entering the country. At that point, their options are greatly reduced. Don’t let this happen to you and ensure you reach out well before you consider moving to Canada.

6. You Will be Subject to 2 Different Estate Tax Regimes

As a US Citizen living in Canada, you will be subject to both the US estate and gift tax regime, in addition to the Canadian deemed disposition upon death rules.

A comprehensive discussion of “death taxation” is beyond the scope of this article, however, please consider discussing your cross-border estate plan with an experienced tax accountant to ensure you properly plan for your wealth, beneficiaries, and your future.

7. The US Government Will Want to Know What Canadian Assets You Own

As mentioned above, in addition to regular 1040 returns you will also be required to complete foreign financial account reporting forms to the US Treasury department. The US government likes to keep tight tabs on the assets of its Citizens. It accomplishes this objective by requiring taxpayers outside of the country to file FBAR forms.

Form 114 requires that a taxpayer disclosure the highest balance in all her foreign (foreign to the US) financial accounts. Form 114 and related instructions can be viewed here.

8. Receive Specific Amounts of Income Before Entering Canada

In many cases, depending on the specific US state from which you are moving, Canadian taxes will be higher than your previously combined Federal and State taxes payable. If you are anticipating receiving a large bonus, retirement allowance, or IRA distribution it could be beneficial to receive the income before moving to Canada. In addition, one might consider exercising stock options earned in the US before entering Canada to ensure additional Canadian tax is not paid on these stock options.

Also, for individuals that are moving to Canada and working for the same employer, ensure you speak to your employer about the tax consequences of working for a US employer while maintaining Canadian tax residency. In many cases, US employers will report employment earnings of Canadian employees on US W2 forms including Social Security and FICA withholdings. Canadian employees working in Canada for US employers need to be set up on Canadian payroll withholdings (CPP and EI) and ultimately reported on a T4 slip.

Depending on your current tax rate, planning for such strategies could result in significant tax savings.

9. If Your Spouse is Not a Canadian Citizen They Will Need to Apply for Their Canadian Permanent Residency

The specifics of spousal immigration are beyond the scope of this article, however, although the media may lead you to believe that anyone can simply “move to Canada”, the rules certainly do not allow for such a move. If you do have a sponsor you may be able to obtain Canadian permanent residency. Your PR status would be similar to what we would consider a Canadian Green Card.

Non-US citizens may be eligible for working Visas or permanent residency if they meet certain criteria. Contacting a Canadian immigration lawyer to help with your non-Canadian spouse’s entry status is imperative.

10. Find a Cross Border Team That Can Work Together

From taxes, investments, immigration, and legal issues, moving to Canada can result in many challenges and complexities. Finding a good team consisting of a cross border tax accountant, investment advisor, and immigration lawyer is key to a seamless move across the border. Contact me today at Phil@PhilHogan.com and I’ll be happy to connect you to help you with your move.



  1. Hi there

    My wife is trying to convince me to move to Canada (she’s a Canadian citizen) and although it feels quite overwhelming to leave my hometown it looks like it will happen sometime next year.

    My main retirement asset is my IRA and I wonder if I can transfer it to Canada or should I leave it in the US. My broker is not sure if she can keep me as a client, but she’ll be getting confirmation of this fact soon.

    Thanks for any help you can provide

  2. I just moved up to Canada and after reading this article I feel like I should have obtained appropriate professional advice. Should I keep my investment accounts and 401k in the US while I maintain a residence in Canada? Will I be double taxed?

  3. Hi phil

    I’m moving to Canada from California in early 2018. I’ll be with the same employer and working from home. My wife if from victoria and we’ll be settling down to raise a family.

    I have the option of becoming a self employed contractor or employee paid on a W2 while I’m in Canada. My accountant in the US doesn’t deal with Canadian taxes so I thought I would try you.


    • Hi Rickson

      In most cases it will be much easier to become a contractor of the existing company than to stay no US payroll. Technically speaking, if you were on an employee working in Canada for a US employer they would have had to setup a Canadian payroll account and remit CPP and EI to the Canadian government. It’s definitely worth asking them if they are willing to setup these accounts, however in most cases they are not willing.

      Other items should be considered such as whether you have a matching retirement plan with the company that would not be there under a contractor agreement.

      Hope that helps

  4. My broker in the US is telling me she can’t handle my account after I move to Canada. Should I close the account before moving up? We’ll be making the full move in February of 2018 to Ottawa.


  5. We just moved to Victoria in the summer and still have assets in the US. We have 2 houses, one of which was our principal residence before moving and the other a rental. Other assets include IRA, small 401k and regular investment account. We are hoping to move most of our assets up to Canada as this will be long-term move.

    Should we have sold our assets before moving up? I’m worried we didn’t get great advice from our US accountant and lawyer.


  6. I’m a US citizen living in Winnipeg and I moved to Canada about 10 years ago. I filed US tax returns on the first year I entered Canada but since then I haven’t filed taxes. My other US citizen and American friends tell me I should have been filing the whole time and I’m getting quite scared. I read on your blog that you could file or catch up late returns to the US and avoid penalties on any late filings. Is this true? My situation should be quite straight forward. I work for a company, I make about $90,000 a year, I have an RRSP, I have a TFSA, I’m not currently married, but I would like to put away some more money for investments. I might also be moving back to the US, so it’s imperative that I get caught up on my late filings so I don’t get stopped at the border. Is this something you can help with?

  7. Hi

    I’ll be moving to Canada next year and I’ll need some help in the tax planning side. I have a few stocks that have appreciated in value significantly that I would like to hold on to, but if I have to pay Canadian tax when I sell I would rather get rid of. Will I have to pay Canadian taxes on these?

    • When you move to Canada, your assets are technically revalued to their fair market value. And the intention here, is that Canada is not going to tax you on any approved gains that you earn before you moved to Canada. But the technicals and the approach to how to manage that move for tax purposes is a lot more complex. So let me give you an example…

      So let’s say, you own Apple’s stock that you purchased for $100 that’s now worth $160 and you’re thinking about moving to Canada. As you enter Canada, so the day you enter Canada for tax purposes, your new cost-basis for these Apple shares will be $160. So if you move to Canada and if you sell the Apple shares immediately, the fair market value proceeds will be $160, your cost basis for Canadian purposes will be $160. So you have 0 gain in Canada. Now you still will, assuming you’re still a US citizen, have a gain in the US of $60. And you’ll pay tax to the US but you certainly will not pay tax on that same gain in Canada. If you have any additional questions about that please let me know.

  8. we currently live in Florida and have assets spread throughout the world. We are considering moving to Canada and have narrowed it down to Vancouver Island. How does Canada view international investments? Would it be more beneficial to consolidate investments before or after moving to Canada? I feel like we need to simply matters as we get deeper into retirement.

  9. I moved up last jan and now my fidelity broker is telling me I can’t keep my ira and stock account with them in seattle. I ask around locally and no one seems to be able to hold ira accounts although they can transfer up my stocks. any other options?

    I’m also expecting a rather large inheritance from my grandfather in the next few years. If i’m still living in canada will this pose a problem?


  10. Hello Phil,
    My wife (a U.S. citizen, landed immigrant in Canada) works from home and lives here in Canada. She is employed by a U.S. company and travels to her office there once a month for a week at a time. But for the majority of her time she works from her home office here in Canada. She pays her taxes to the CRA and is up to date but we are behind in keeping up with her tax returns to the IRS since 2013 to show employment income and taxes paid.

    We still own a rental property in the US and we have been reporting that income to the CRA as well.
    Could you help us catch up with this, and give an estimate of what the fees would be to get her caught up?

  11. Philip,
    A United States citizen, I moved to British Columbia (and Canada) for the first time in 2017. I
    recently filed my United States Federal and (US State of prior residence) taxes and purchased the
    turbo tax software to attempt to file for myself in Canada. I surrender, at least for this first

    In the United States for 2017, I had full‐time employment and a separate business (operating simply
    under my name) and the business generated tax loss in the context of my US Federal return. In
    Canada for 2017, I was only a full‐time student and had no employment in Canada.

    Would you be able to assist me in preparing my 2017 Canadian returns? Are you located in Victoria?
    (I am now on Salt Spring Island and can travel to Vancouver Island easily, if appropriate. Thank
    you for your consideration.
    Please advise.

  12. Hi Phil

    We (my wife and I) have lived in Seattle for 20 years and are now getting close to moving back to Victoria. We are both Canadian and US citizens. We have saved a fair amount in our 401k and IRA plans and are wondering if we need to plan for anything before moving backup.

    We have friends that moved up a few years ago that used the wrong firm and everything got complicated very quick. They are still working through the problems right now.

    let us know if we need to plan for anything and we’ll be in touch.


  13. So, I’m an American, wanting to work and live in Toronto. This was a response to my question about getting a work permit:

    “In order to acquire a work permit you would need to find an employer willing to do a labor market impact assessment for you and we unfortunately do not assist in the job search.

    This is an application they would need to do before you apply for a work permit proving that they tried to hire a Canadian but could not; they would need to advertise for at least one month in 3 different sources, justify after the ads why they want to hire you over any of the Canadian applicants, pay a government fee of $1000, and they would need to wait the 4-6 months it takes to receive a decision on this before you can apply for a work permit. ”

    Are there why Canadian attorneys or immigration specialists in the group ( or other) that can tell me how accurate this is? It’s very disappointing of it’s true.

  14. I would like to figure out and discuss filing “cross border” taxes for the U.S. and Canada. I am seeking to a hire a firm to complete my “cross border” individual tax forms for tax year 2018. I moved with my family from the U.S. to Ontario in July 2018, and will need to file Canadian taxes, U.S. Federal taxes, and possibly North Carolina State taxes; and I would like to receive a quote for completing all of the necessary tax forms.

    My family includes me my wife , and my daughter. We are all U.S. citizens. I have a Canadian Work permit and obtained employment as a Social Worker. Shehas a Canadian Study Permit and began a graduate program at Ontario August 2018. Our Canadian Permits are valid for 3 years until August 2021. We have been physically present and resided in Ontario since July 2018, except for a few days. We need help to determine our residency status for tax purposes, since we are not currently permanent residents of Canada.

    For U.S. taxes, we do not have any earned income in the U.S. for 2018. We have investment income from U.S. banks and mutual fund companies, including interest, dividends and capital gains. Based on my current (limited) understanding; I would anticipate having to file Form 1040 (married filing jointly) with Schedule B (Interest and Ordinary Dividends), Schedule D (Capital Gains and Losses), Form 8949 (Sales and Other Dispositions of Capital Assets), Schedule 8812 (Child Tax Credit), Form 8889 (Health Savings Account, Distribution), Form 8606 (Nondeductible IRAs, Conversion from Traditional to Roth IRA), Form 8962 (Premium Tax Credit, ACA Health Insurance), and Form 2441 (Child and Dependent Care Expenses). We have some savings in Canadian banks, and we moved some U.S. equity assets from the U.S. to Canada (in-kind transfer), and may have to file Form 8938 (Statement of Specified Foreign Financial Assets).

    We do not own any property or have any debt/loan/mortgage, and would plan to take the Standard Deduction (No itemized deductions). Subject to your recommendation, we would probably not take the Foreign Earned Income Exclusion (FEIE) and instead claim a Foreign Tax Credit (Form 1116).
    I know very little about Canadian taxation. Both I have earned income from employment in Canada and will receive T4 forms. We would anticipate having to file Schedule 1, T1 General, ON428, Schedule 11 (Tuition), Form T1135 (Foreign Assets Statement), and Form T778 (Child Care Expense Deduction). Since moving to Canada, we have earned dividends and capital gains on our U.S. investments and may need Schedule 3 (Dividends from U.S. investments) and Schedule 4 (Capital Gains from U.S. Investments). We would be interested to learn more about the possibility of transferring some tuition costs (Schedule 2) and “income splitting”. We haven’t made any contributions (“Canadian Contributions”) or withdrawals from U.S. retirement accounts (Roth or Traditional), and we would like help making a “one-time treaty election” to make our Roth IRA accounts exempt from Canadian tax.

  15. Great blog! Thanks for sharing all this information about moving to Canada. I’ve been thinking about migrating from the States to Canada for a new work opportunity so I’ve been trying to learn more about the entire process, what I need to do and all that. I actually already saw this housing community called Trilogy in Sutton and it’s really near the location of the office where I’d be working if I ever decide to accept the offer and I really love the place based on what I saw from their website. Hopefully, all goes well!

  16. Regarding number 8: should I receive the money in my 401K before moving? I am retired and have just been letting it ride. It’s a federal
    Thrift Savings Plan

  17. Hi,

    I had a question based on the example of apple stock you had given above. I understand that canada considers the base price of a particular stock on the day of entry to Canada.
    But can you suggest what should be done while the market is down?
    Like now, all the stocks are down, the ones I purchased (I dont have bonds, just stocks). Should I make a loss here in USA or take them to Canada ? Can you please advise.

    • Hi Ze

      We often advise to sell loss positions in the US before moving to Canada, however it will really depend on your particular situation and how long you intend on holding the position. It certainly can be tough however to have a loss for US purposes overall and then pay tax in Canada on a gain.

  18. What are the implications for us if we decide to retire to Canada with our investments including a ROTH IRA? Are there any restrictions on how we can use our ROTH IRA funds once we have moved to Canada? Are there any special considerations or taxes we need to be aware of if we decide to move our ROTH IRA account to Canada? Are there any other investments that would be better suited for our retirement plans in Canada? Are there any restrictions on how much money we can bring with us when we immigrate to Canada? Are there any benefits or advantages to being a resident of Canada when it comes to retirement investments?

  19. I got this list from an advisor friend of mine, just thought I would share:

    Here is a checklist for Americans moving to Canada that covers some of the key things they should consider doing and plan for:


    Determine whether you will be considered a resident or non-resident for tax purposes in Canada
    Obtain a social insurance number (SIN)
    Register for a Canadian tax number (if applicable)
    Determine whether you will need to file a tax return in Canada
    Consider hiring a tax professional to help with tax compliance in Canada
    Review the tax implications of transferring money or assets from the US to Canada
    Understand the differences between the US and Canadian tax systems and how they apply to you


    Review the tax implications of transferring investment accounts or assets from the US to Canada
    Determine whether you need to convert your US investment accounts to Canadian accounts
    Understand the differences between the US and Canadian investment markets and how they may impact your portfolio
    Consider hiring a financial advisor who is familiar with both the US and Canadian markets
    Research the Canadian regulatory environment for investments and ensure that you are complying with any applicable rules and regulations


    Obtain a valid Canadian passport or travel document (if applicable)
    Consider transferring your US driver’s license to a Canadian one
    Research and compare the cost of living in different parts of Canada
    Explore options for healthcare coverage in Canada, such as private insurance or the public healthcare system
    Understand the differences between the US and Canadian education systems and research schools and universities in Canada
    Research the job market and employment opportunities in Canada, and consider attending job fairs or networking events to make connections in your field
    Familiarize yourself with Canadian culture, customs, and laws, and consider joining a community group or organization to make connections and integrate into Canadian society.

  20. Hi Phil
    Need a suggestion
    we stayed in USA for 10 years in H1b visa category and now moved to canada as a permanent resident in feb 22.we had some shares in robinhood,IRA and 401ks in usa.
    can i legally keep the stocks and shares in USA in us brokerage accounts or it is advisable to transfer to canada.
    In future i plan to file tax only in canada as i am not us citizen and want to know how to handle my shares and stocks.


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