Canadian cheques

[misa 2]

Quick question... I know a ton of you have had problems depositing Canadian cheques into U.S. banks and I just remembered something. Everytime I've written a cheque to a U.S. company or friend, I've specified on the cheque "US Funds" and the Canadian bank ends up doing the conversion and I've never had a cheque returned. That goes for things I've bought through mail order too.

Are all the problems you've experienced with just straight Canadian cheques written in Canadian funds? The reason I ask is because I will be self-employed with Canadian clients and I'd rather not have to deposit those cheques into my Canadian account (I would have to file taxes in both Canada and U.S. then). I can have my clients write me cheques with a notation saying "US Funds".

Thoughts?

[no one 0]

Not too helpful a response, I'm afraid... I've never attempted depositing Canadian cheques in CAD, but my U.S. bank (HSBC - it has branches in Canada too) was going to charge me a crazy fee for depositing what they'd thought was a Canadian cheque in USD! Thankfully, the issuing bank of the Canadian cheque has branches in the U.S., so my bank waived the fee. Just something extra to consider.

[Cassie 8]

I have had a cheque from a Canadian account marked "US Funds" cause a big problem with my US bank.

I have also had a cheque from a Canadian bank, but from a "US funds account", cause a big problem with my US bank.

I have also had a cheque from a Canadian account cause a big problem with my US bank.

Either I have a bad bank, or this is what you are going to encounter if you try your plan. Not sure what I would advise in this situation.

[misa 2]

Yeah, that's the thing. I always bought stuff from like book clubs and ####### with Canadian cheques and I've marked "US Funds" on it and never was asked to send another one.

So Cassie, your US bank just plain sucks huh?

Which banks cause the LEAST problems? I will be in VA and probably open a Wachovia account. Or should I go with Bank of America? Gah, what a hassle!

Or maybe I'll just suck it up and file taxes both in Canada and the U.S...

Edited March 7, 2007 by misa

[misa 2]

Or... (hopefully Our Mao will see this) can I do the following?

- Reside in the U.S.

- Deposit client cheques into my Canadian account (transfer it to U.S. when necessary)

- Only file US taxes with that income as "Foreign Income" and doing the taxes in the U.S. necessary for self-employed and skip Canadian taxes altogether? I'd be paying the IRS, but not Revenue Canada. As I understand there's a tax treaty so you don't pay double taxes.

Or do I have to file taxes in both countries this way?

- file Canadian taxes as self-employed even though I won't be living there and pay Revenue Canada

- then just declare that as Foreign Income on U.S. taxes with no U.S. taxation?

Edited March 7, 2007 by misa

[Flames9_RN 358]

I bank with Wachovia, and have had problems with them cashign Cdn cheques with them. I eventually learned to just bank at 1 brancj, where they got to know me! Other Wachovia branches wanted to charge me a $75 fee for each cheque!!! 1 time I actually got cheques retruned to me via the mail stating the amount had to be over $200!! So I stuck with 1 branch and all was ok. And the only reason why it worked there was because the bank managers wife was from England, so he had done some previous research!! As wel i tried to see the same teller, otherwise the teller would state I was incorrect, and I would politely have to ask for the bank manager to come up! lol fun fun. Oh yes ,there is no such thing as post dating cheques here!! They will cash them no matter what!!

Edited March 7, 2007 by flames9

[misa 2]

What a hassle!

Well, looks like Wachovia might be out since I don't think I can convince my husband to drive to Arlington each time I need a cheque deposited. And what would I say to them? "Hey, I know you can cash them no problem because you do it for that guy who's in here all the time going on about Tim Horton's."

I think I read somewhere here that Bank of America accepted Canadian cheques no problem. I'd like to avoid depositing it into my Canadian BMO account simply because my sister would have to do it for me everytime I got a cheque (every 2 weeks) and I'd like to avoid having to file taxes in both countries. But it looks like that might be my safest bet with only 1 day hold on the cheque since my client also banks with BMO.

It's so weird since we can cash US cheques here NO PROBLEM with no fees or anything!

[Flames9_RN 358]

Best to contact the bank manager and see what they have to say. Asking a bank teller is pretty much useless, unless it is the head teller. Once I got that Wachovia branch trained it was great. No fees, an ok exchange rate (custom house was better) and they didnt put a hold on the funds, even though they had to send it away to their international collection place. It was just a hassle at the beginning

[together2love 0]

I bank with Washington Mutual and have absolutely no problems cashing any type of Canadian cheque and some of those were even pretty significant amounts on them. I'm not sure there is a Washington Mutual in your area of the US though.

[misa 2]

I emailed Bank of America to see what their "official" stance on Canadian cheques were. I had to go back and change "cheques" to "checks" though so they wouldn't get confused!

I'll ask my husband to contact a specific Wachovia branch to see what they say. In the meantime, I'll also get him to check with the credit union that he banks at. He used to work there so hopefully they will be helpful!

There's also a few Washington Mutual's where I'll be moving to (Richmond, VA), I'll get him to contact a branch there too.

Thanks guys!

[Our Mao 0]

Or... (hopefully Our Mao will see this) can I do the following?

- Reside in the U.S.

- Deposit client cheques into my Canadian account (transfer it to U.S. when necessary)

- Only file US taxes with that income as "Foreign Income" and doing the taxes in the U.S. necessary for self-employed and skip Canadian taxes altogether? I'd be paying the IRS, but not Revenue Canada. As I understand there's a tax treaty so you don't pay double taxes.

Or do I have to file taxes in both countries this way?

- file Canadian taxes as self-employed even though I won't be living there and pay Revenue Canada

- then just declare that as Foreign Income on U.S. taxes with no U.S. taxation?

Misa,

It does not matter whether your clients paid you in US or Canadian currency. What matters is, when you bill your client and where you are working. If you were working in Canada, then that is part of your Canadian income. If you're working in the US for your Canadian clients, then you have earned US income (even though your client is in Canada)

So to answer your question, when you reside in the US, you can still continue to bill your Canadian clients. Those fees that you bill your clients (in Canada or the US) will be considered to be US income. You dont have to worry about where they deposit the money (US or Cdn bank account). When you file your taxes, you will report what you have earned in the US into your 2007 US tax return. I'm also assuming that you will be filing your 'final' return in Canada for the 2006 taxation year.

Let me know if you still have questions or send me a private message.

Thanks.

[Our Mao 0]

One more thing about the banking and the checks. I would suggest that you start billing your clients in US currency. I know they'll probably not be impressed but you can just adjust your rate. For example, if you're billing them $100/hr Cdn, bill them at $90/hr US instead. It's easier for you further down the road. You won't have to deal with 'hold funds' and a whole bunch of other anoying stuff.

At first I was gonna recommend that you create a paypal account and have them send you payment there but then you would be setting up a Cdn paypal account vs a US paypal account. Trouble arise whenever you receive Cdn funds and tries to convert it into US funds AND over to your US account. My mom works in a bank and she said even if I have a US currency account in Canada, write a check in US denomination and deposits it in an US bank, the bank will hold your funds for 30 days! So if you're in a hurry to get your money out, you'll be out of luck. My current bank is CIBC and they are doing this to me. I dont know about other banks. Also they do the same thing to money order. It's very annoying. It's your own money and yet you can't do anything about it!

Sorry I couldnt help.. I'm more of less in the same boat!

[Saddle Bronc 124]

You've heard of money orders?

[warlord 73]

Yeah money orders are the best way to get money from Canada. You will have a hard time trying to cash Canadian Checks here. My parents always just send US Money orders and the problem is solved. Though it's a lot harder to find a place that will make out Canadian Money orders though, that you have to go to the actual Western Union or whatever to get done, banks don't seem to do that anymore from my experience...

[Our Mao 0]

Cdn banks do money orders but again (CIBC), if you have a CIBC money order and try to deposit it in a US bank (for me it's also Washington Mutual), they'll hold funds for 30 days. I'm not trying to be difficult here but I just want you to know what the real problems you will have to deal with in the situation. I know it's retarded but I didn't make those stupid banking rules! The US bank takes 30 days to process your money order and if you're in a big hurry for the money, you'll be in trouble.

Western union might work but dont they charge an arm and a leg for fees?