Tax question

[jg_am 0]

Hey gang! I've seen here and there my fiancee will have to file some sort of tax return before she moves to the States. Is there anywhere I can find out what she needs to do/what forms to fill out? Thanks!

[EricM 0]

Hey gang! I've seen here and there my fiancee will have to file some sort of tax return before she moves to the States. Is there anywhere I can find out what she needs to do/what forms to fill out? Thanks!

I did some googling on this a while ago in anticipating of leaving, and I *think* this is the only form you need to fill out and send to CRA:

http://www.cra-arc.gc.ca/E/pbg/tf/nr73/nr73-04e.pdf

That's all I know, so far, but I'm sure other helpful people around here have some more answers!

[Emancipation 2]

You could start here.

http://www.cra-arc.gc.ca/tax/nonresidents/...esidency-e.html

That tells you who pays CDN taxes, basically if you still have ties/residency in Canada for that tax year you are obliged to pay taxes. I don't understand it to mean you have to file taxes when you leave. CRA runs on a calander year, and during that year if you have been in Canada for a certain period of time you must file a tax return. That's what I'm hearing!

http://www.cra-arc.gc.ca/tax/nonresidents/...s/deemed-e.html

[hockeygal 0]

It all makes my head hurt. I am going to end up working 2 - 4 weeks in 2007, so I will have to deal with that come tax time in 2008 I guess. Not to mention in 2007 I will have to do something about my work pension and cashing part of it out and then transferrring... ...yuk.

For the next 3 months, I am going to keep all my ties going. I will pre-pay my BC medicare, maintain my bank accounts, my job, even my gym membership! Once everything is settled there and I have started the next process, I will wrap things up here. I can really only focus on one thing at a time. And I am a big coward who needs to let go slowly.

Edited November 30, 2006 by hockeygal

[ceriserose 1]

On the year a person emigrates from Canada they file the tax return for the province they left, but mail it into the International Tax Office instead of the provincial one they would normally.

On the first page of the T1 you indicate that you've left the country in the space for it.

(The rest of this is good to know but might be overwhelming...it's just all from the old forums and is now gone.)

Tax Treaty

There is a tax treaty between the US and Canada and in most cases you will not be taxed in both countries. There are primary and secondary measures Revenue Canada will use to determine "residency" for tax purposes. If you hold vacant property in Canada that you could return to, or if you have a spouse/dependents who remain in Canada you can be taxed in both (those are both primary measures). If you have a rented rental property in Canada you shouldn't be taxed in both countries; however you will need to report the rental income on your US tax return.

Secondary measures include bank accounts and credit cards. Both are okay to keep in Canada; however, you must let your banking facility know of your move to the US and you will then be subject to a 25% nonresident tax on any financial transactions (such as withdrawing an RRSP). Credit cards and things like car loans are at the discretion of the lending company so it's best to check with them prior to moving to determine if you can make cross-border payments without breaking your contract agreement.

Filing the last Taxes

On your exit tax filing, Revenue Canada will pro-rate the tax credits allowed, so if 90% or greater of your income was derived from Canadian sources, you should provide a letter noting it so they will not pro-rate the tax credits. (So for example, I left Canada in July 2005 and didn't get work authorization in the US until late December 2005. I worked in Canada from January - April 2005 but didn't work in the US...therefore 100% of my income was from Canadian sources and so I informed them and my tax credits weren't pro-rated to the months I was in Canada only.)

If you have RRSPs used in the Home Buyers Plan or Lifelong Learning Plan you should know that they are required to be paid back in full within 60 days of your exit date from Canada. If you don't pay them back, they count as income on the tax form.

Any RRSPs you hold in Canada need to be reported on your US taxes. I don't have the form number off the top of my head, but it gets posted frequently during tax season. (Note that you aren't taxed on them but you must report them yearly to the IRS.)

Taxes you file go to the International Tax Office in Ottawa. Their phone number is 1-800-267-5177 (I hope...I've done this from memory!).

I suggest that anyone who will be moving from Canada give them a call and ask what they'll need to do; you can ask questions without giving any identifying information and they can assist you in what you'll need to do specific to your circumstances.

It all makes my head hurt. I am going to end up working 2 - 4 weeks in 2007, so I will have to deal with that come tax time in 2008 I guess. Not to mention in 2007 I will have to do something about my work pension and cashing part of it out and then transferrring... ...yuk.

For the next 3 months, I am going to keep all my ties going. I will pre-pay my BC medicare, maintain my bank accounts, my job, even my gym membership! Once everything is settled there and I have started the next process, I will wrap things up here. I can really only focus on one thing at a time. And I am a big coward who needs to let go slowly.

Yuppers, as well as any EI you collect in the US after you leave Canada.

As for the work pension, I left mine sitting since I have no idea where I want to put it. My nephew is now in the industry and they work cross-border so I might shoot some work his way.

[Kathryn41 3,205]

Actually, this link is the place to start:

http://www.cra-arc.gc.ca/tax/nonresidents/.../leaving-e.html

It will tell you what considerations your fiancee needs to make before, during and after leaving Canada to move to the US. She will need to notify Canada Revenue Agency of her new address when she moves so they will be able to mail her her last tax forms. They are the normal tax return forms although, depending on her situation, she may require some additional forms (ie. investments, capital gains, etc.). She will file her final tax return with Canada pro-rated to the time she left Canada for good and make the various deductions also pro-rated, although there are exceptions that are detailed in the emigrants guide. Her return will, if Iremember correctly, be filed with the International Tax Office in Ottawa. You will also find it useful to consult one of the US tax guides - those big books they usually sell early in the year for around $20 - to see what you need to consider for the year during which your fiancee moves to the US and you marry to help you determine what your best financial decisions should be. Canada and the US use very distinctly different methods of taxation. Finally, Canadian taxes are due 2 weeks later than US taxes, however, for the year in which you marry you will need to have the final tax information of your Canadian spouse ready to submit with your US tax returns, so they need to be done well before the deadline date. (Probably more than you needed to know right now, heheh)

So, read the Emigrant document from CRA and then read the one on Non-residents - it may or may not apply:-).

Edited November 30, 2006 by Kathryn41

[Flames9_RN 358]

RRSp reporting to IRS is done on form 8891 http://www.irs.gov/pub/irs-pdf/f8891.pdf If you cal IRS about, most know nill about it!!! One can goto http://forums.serbinski.com/index.php?sid=...9e0066bcbee3f79 and it has a topic on how to fil lit out. Do a search, as the guy that answers most questions (nelson) gets grumpy if you don't. As in most forums, it has good info and not so good info.

[ceriserose 1]

Actually, this link is the place to start:

http://www.cra-arc.gc.ca/tax/nonresidents/.../leaving-e.html

She will need to notify Canada Revenue Agency of her new address when she moves so they will be able to mail her her last tax forms.

And if you're like me and totally forget to tell them, you can download the forms for each province off the CRA website.

RRSp reporting to IRS is done on form 8891 http://www.irs.gov/pub/irs-pdf/f8891.pdf If you cal IRS about, most know nill about it!!! One can goto http://forums.serbinski.com/index.php?sid=...9e0066bcbee3f79 and it has a topic on how to fil lit out. Do a search, as the guy that answers most questions (nelson) gets grumpy if you don't. As in most forums, it has good info and not so good info.

I knew when I saw you at the bottom of the page you'd have the form number.

[Our Mao 0]

I have a question.. is it possible to transfer the entire amount of Canadian RRSP into some US IRA account or the equivalent of RRSP in US? If so, do we avoid paying taxes and what knot?

[ceriserose 1]

I have a question.. is it possible to transfer the entire amount of Canadian RRSP into some US IRA account or the equivalent of RRSP in US? If so, do we avoid paying taxes and what knot?

I got this info from my nephew regarding this very issue:

No rollovers of Canadian RRSP's to U.S. IRA's or similar plans are

advisable, since such a transfer would be considered a distribution

under Canadian law, and would trigger taxation in both countries under

the Convention.

Accordingly, persons moving to the U.S. after a work period in Canada

should consider leaving the RRSP intact, and drawing funds from the plan

only upon retirement or as required by Canadian law.

Here is the link for the website as well:

http://www.serbinski.com/CdnInUS/Work_In_t...rsp_in_usa.html

[Our Mao 0]

Thanks.. that's very useful information!

[hockeygal 0]

The guy who wrote the Border book (forget the title) advises against keeping RRSPs in Canada if you will live and retire in the USA.

I can't remember why though!

[Jersey Girl 2]

The guy who wrote the Border book (forget the title) advises against keeping RRSPs in Canada if you will live and retire in the USA. I can't remember why though!

That would be Robert Keats, and if you need a good cross-border accountant, they're the ones to contact. David Levine

They amended my tax return after Serbinksi submitted it in a way that could have cost me tens of thousands of dollars extra. I don't wish to tortue anyone with the details, except to say, you can leave Canada and still be considered taxable on your worldwide income!

Be sure your last Canadian return is an "exit return," and that you cut any ties Rev Can can interpret as making you taxable. To avoid complications, keep your taxes separate from your American spouse until you're officially free and clear.