I have helped hundreds of people successfully navigate from the US to Canada. If you're thinking of moving or retiring to Canada contact me today to chat about your plans.
I can be reached via email at email@example.com, by phone at 250-661-9417 or through my contact page here.
I look forward to speaking to you soon.
Phil Hogan, CPA, CA, CPA (CO)
Cross-Border Tax and Investment Specialist
Hi, I’m a radiologist that will be moving up to Victoria in the summer to work on contract at the general hospital. I’m concerned that I haven’t properly planned for the tax consequences of the move. I can outline in general terms my situation and perhaps we can setup a meeting to discuss anything I need to consider as well as help with my tax returns next year.
Here is my situation:
- Dual citizen of Canada and the US
- worked in the US for over 6 years
- current assets include IRA, retirement account and a house in the US
- I will be earning around $480,000 my first year at the hospital
- Married to an American and we have 1 son
- No significant assets in Canada at the moment
- 10 to 15 years away from retirement
- Currently renting but are in the market to buy a house
Any perspective you can provide on my situation would be appreciated.
Thanks for the email. As you outlined above it would definitely be a good idea to setup an appointment to discuss your tax situation in more detail. That being said, let me give you some items to consider:
- As you are a Canadian citizen I assume you already have a Canadian social security number. If you haven’t done so yet I would start the process of applying for a SSN for your husband and son
- For 2016 you will file a part-year Canadian tax return and a jointly filed US tax return
- There may be some significant tax advantages to incorporating your professional activities such as income tax deferral and income splitting. We can discuss the potential incorporation at the meeting
- You may be able to claim a principal resident exemption on the sale of the US home as long as it was your principal residence for at least 2 out of the last 5 years. Therefore you’ll want to consider selling the property in the next few years if you have an accrued gain on the property.
- Some items you may want to avoid when settling in Canada as a US citizen:
- Canadian mutual funds (PFIC issues)
- Tax Free Savings Accounts. Similar to ROTH IRA accounts in the US, however not recognized by the IRS
The list above is only a quick summary of some important items as we can discuss your situation in more depth at our meeting. As you are currently not required to pay installments to CRA (Canada Revenue Agency) you’ll want to set aside between 35% and 40% in tax money just to be safe.
Once again, please give me a call at 250-381-2400 or send me an email at firstname.lastname@example.org and we can setup a time to discuss your situation in more detail. As outlined above incorporation may be a viable option for you as we should be able to structure your situation in a much more tax efficient manner.
I look forward to our call.